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The fourth version of the CJRS “furlough” grant scheme started on 1st May 2021 and will run until 30th September with employees affected continuing to be supported such that they are entitled to be paid at least 80% of their “usual pay” subject to a limit of £2,500 a month for hours not worked. The government, via HMRC, will continue to provide support up to this 80% figure for the months of May and June. The government support then reduces to 70% for July and the 60% for August and September with the employer being required to make up the difference. The employer is also required to pay national insurance contributions and pension contributions on the full amount paid to the employee.
In order to be included in a CJRS “furlough” grant claim for periods after 1st May 2021 an employee must have been on the payroll and subject to an RTI (real time information) submission between 20th March 2020 and 2nd March 2021.
The claim calculation continues to be complex with care required to compute the employee’s “usual pay” and “usual hours” particularly where the hours and pay varies. Furloughed hours for the grant claim continues to be the difference between the employee’s usual hours and hours worked in the claim period.
In order to qualify for the first and second CJRS “furlough” support grants an employee needed to be included in an RTI submission for 2019/20 by 19th March to be included. If that employee continues to be employed their “usual pay” for the next version of CJRS continues to be that same amount, even where they have had a pay rise.
Those who failed the original eligibility test but were on the payroll and subject to an RTI submission before 30th October 2020 were eligible for the third version of furlough that started on 1st November 2020. If that employee continues to be employed their “usual pay” for the next version of CJRS continues to be that same amount, again even where they have had a pay rise.
For employees on fixed pay who were first reported through RTI between 31st October 2020 and 2nd March 2021 the “usual pay” is based on the last pay period ending on or before 2nd March 2021. For those on variable pay calculate 80% of the average wages payable between 6th April 2020 (or, if later, the date the employment started) and the date before they were first furloughed on or after 1st May 2021.
The grant calculations don’t get any simpler! If we can be of assistance in helping you with your claims please get in touch.
Note that HMRC may impose penalties on employers that have overclaimed, even for careless errors.