The Coronavirus Job Retention Scheme (CJRS) is again being extended by the government to support businesses and individuals impacted by the disruption caused by Coronavirus (COVID-19) pandemic.
This extension will cover periods starting on or after 1 May 2021 to 30 September 2021, with claim changes coming in place for periods starting on or after 1 July 2021.
Who is eligible?
For periods starting on or after 1 May 2021, employers can claim for employees who were employed and on their PAYE payroll on 2 March 2021. A PAYE Real Time Information (RTI) submission should have been made between 20 March 2020 and 2 March 2021, notifying a payment to the employee.
Employees can be on any type of employment contract and can be furloughed either on a full-time or part-time basis. The employee must be paid at least the National Minimum Wage rate for the hours worked.
Refer to the HRMC guidelines on the Eligibility Criteria.
What will the claim cover?
May and June: Employees will be able to receive 80% of their usual salary for hours not worked through this scheme, the Government will cover 80% up to a cap of £2,500. This cap is proportional to the hours not worked. The Tax and National Insurance deduction need to be made on the full amount being paid to the employee, including any scheme grant.
July: Employees will be able to receive 80% of their usual salary for hours not worked through this scheme. The government will cover 70% of the hours not worked up to a cap of £2,187.50 and the employer must contribute the remaining 10% up to the cap of £312.50. This cap is proportional to the hours not worked. The Tax and National Insurance deduction need to be made on the full amount being paid to the employee, including any scheme grant.
August and September: Employees will be able to receive 80% of their usual salary for hours not worked through this scheme. The government will cover 60% of the hours not worked up to a cap of £1,875 and the employer must contribute the remaining 20% up to the cap of £625. This cap is proportional to the hours not worked. The Tax and National Insurance deduction need to be made on the full amount being paid to the employee, including any scheme grant.
The CJRS grant will not cover any employer NICs or pension contributions.
How to make the calculations?
- Employees who were previously furloughed through CJRS:
The same reference pay and usual hours need to be used for making the calculations. - Employees who weren’t previously furloughed through CJRS:
Reference pay and usual hours calculations differ for those not previously engaged under the scheme.
Refer to the HMRC Guidelines for more details. You can use the HMRC Calculator to calculate the furlough pay.
How to claim?
Employers will be able to submit claims through the CJRS Portal and grant payments are expected to take approximately six working days from the claim submission date.
Claims need to be submitted by the 14th of the following month to ensure prompt claims. (e.g., a claim made for May needs to be submitted by 14 June 2021 at the latest).
The claim period will need to cover at least seven consecutive calendar days and will have to start and end in the same calendar month – separate claims need to be submitted for the days which fall into each month.
How to process furlough payments through Primo Payroll?
You will need to manually calculate the claim amount for each employee, depending on whether they are full-time or flexibly furloughed.
Add a payment code ‘Furlough Pay’ and enter the calculated figures in the ‘Payslip/Group Entry’ and process the payroll.
If you need any assistance in setting up the payment code you can contact our support team at support@accentra.co.uk
