The Budget 2021 brought about several changes to the Furlough or Job Retention Scheme (JRS).
The headlines are that the furlough scheme has been extended to 30 September 2021 and that new employees up to 2nd March are now eligible.
Eligible Employees
Eligible employees are currently employees who were employed on 30 October 2020 and for whom a RTI return had been made between 20 March 2020 and 30 October 2020 notifying HMRC of a payment of wages.
From 1 May 2021 this changes to be, Employees who were employed on 2nd March, and for whom a RTI return had been made between 20 March 2020 and 2 March 2021, notifying HMRC of a payment of wages.
It is therefore important to clarify when HMRC received your RTI returns.
What can you claim:
Up to 30 June 2021, you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.
For July 2021, this changes to 70% up to £2,187.50, but you still have to pay the employee a minimum of 80% up to £2500.
For August and September 2021, this changes to 60% up to £1,875, but you still have to pay the employee a minimum of 80% or £2500.
Calculation of employee’s usual salary
The calculation of usual pay is based on the amount they were paid previously. If their pay or working arrangements have changed then the amount you can claim may be based on the previous amounts.
The reference period is the last pay period ending on or before the date they were eligible.
For employees who were on the payroll at 19 March 2020, this is February 2020
For employees who were first RTI’d after 19 March 2020, but before 31 October 2020, the reference period is the last pay period on or before 30 October 2020. This applies to periods starting after 1 November 2020.
For employees who were first RTI’d after 30 October 2020, but before 3rd March 2021, the reference period is likely to be the last pay period on or before 2nd March 2021. But this has not yet been formally announced. This applies to periods starting after 1 May 2021.
For salaried employees, take 80% of the pay of the reference period.
For employees with variable pay the reference periods can vary.
For employees who were on your payroll at 19 March 2020, the usual pay is 80% of the higher of
Wages earned in the same month last year, or
Average wages for the tax year 2019/20
For employees who were on your payroll at 30 October 2020, but not eligible at 19 March 2020, it is 80% of the average wages from 6 April 2020 (or date of start) to the day before they were first furloughed on or after 1 November 2020.
For employees who were on your payroll at 2nd March , but not eligible previously, has not yet been announced.
