Reminder of the changes to the Coronavirus Job Retention Scheme (CJRS) from 1 September 2020
21 August 2020
From the initiation of the CJRS grants, employers have been able to claim back 80% of an employee’s usual wage up to a cap of £2,500 per employer, however, from 1 September this is reduced to 70% of usual wages up to a cap of £2,187.50 per month for the hours furloughed employees do not work.
Although the claim percentage has reduced, employers will still need to pay those furloughed employees at least 80%, up to the cap of £2,500 per month. This means that an employer will have to fund the difference in what can be claimed as a grant and what is processed for payment to the employee.
The caps are proportional to the hours not worked. For example, if an employee is furloughed for half their usual hours in September, employers are entitled to claim 70% of the employee’s usual wages for the hours they do not work, up to £1,093.75 (50% of the £2,187.50 cap).
From August 2020, employers have had to cover the cost of furloughed employees’ National Insurance (NI) and pension contributions from their own funds. This will continue throughout September and October, until the scheme ends on 31 October 2020.
HMRC guidance has been updated live webinars are being offered to help and support employers in understanding the changes to the scheme. Webinars are available to be booked online- registration details can be found here.
Employers are reminded that, when claiming for 100 or more employees, they are able to download and use the HMRC template to ensure that all data needed is submitted.
It is important that employers provide all the data needed to process a claim. Payment of grants may be at risk or delayed if an employer submits a claim that is incomplete or incorrect. HMRC will get in touch where any employee data is missing from previous claims.
HMRC have begun to issue ‘nudge’ letters to a small number of employers in a bid to prompt them to double check that their CJRS claim is accurate and that employees who are contained within claims were eligible to be included. It is important that these letters are not ignored and that if an employer receives such a communication, they should contact HMRC to discuss their claims. Where the employer has an authorised tax advisor their advisor will also have been sent a letter.
If an over-claim error is found by an employer, there is the ability to make a change to the claim amount. Employers are strongly encouraged to check claims to ensure that they are correct and if any errors are found, they are corrected and repaid to HMRC.
If an employer is to make additional claims in the future, then the change can be amended on the next grant claim made, reducing the amount of the new claim. Any adjustments will need to be kept for six years. If no future claims are to be made, the employer must contact HMRC directly on 0300 322 9430 to repay the overclaimed amounts.
Any overclaimed grants that have not been repaid must be notified to HMRC by the latest of either:
- 90 days after the date the received grant that was not entitled
- 90 days after the date the received grant was no longer entitled due to circumstances changing
- 30 October 2020
Employers are warned that, if this is not actioned, a penalty may be imposed. By making a repayment of any overclaimed grants, any potential tax liability in respect of the overpayment of the Coronavirus Job Retention Scheme will be prevented. HMRC has advised that it will not be actively looking for innocent errors in their compliance approach.
As mentioned above, CJRS guidance has recently been updated to make it easier for employers to find the most relevant, up-to-date information.
If older guidance is still required, it can still be found within GOV.UK. On each guidance page, for example, 'check if you can claim for your employees' wages through the Coronavirus Job Retention Scheme' or 'check which employees you can put on furlough to use the Coronavirus Job Retention Scheme’, a link to previous guidance can be found in boxes at the top of these pages. Archived older guidance can also be accessed via this link.
As ever, HMRC is asking employers to stay vigilant about scams, which may mimic government messages as a way of appearing authentic and unthreatening. Search 'scams' on GOV.UK for information on how to recognise genuine HMRC contact. Employers can also forward suspicious emails claiming to be from HMRC to [email protected] and texts to 60599.
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