The Coronavirus Job Retention Scheme (CJRS) has been extended and changed several times since it began in spring 2020. Originally introduced to prevent employees being laid off (unpaid leave), the scheme finishes on 30 September 2021. A total of 11.6 million jobs have been furloughed for at least part of the duration of the scheme.
Do you have furloughed employees?
For claims relating to August and September 2021, the government will pay 60% of wages up to a maximum cap of £1,875 for the hours the employee is on furlough. September claims must be submitted by 14 October 2021.
Payments received under the scheme must be included as income, with employment costs deducted as normal when calculating taxable profits for income tax and corporation tax purposes.
What happens next?
When the scheme closes at the end of September, you must decide between three options:
1. Bring your employees back to work on their agreed terms and conditions.
2. Terminate their employment (normal redundancy rules apply to furloughed employees).
3. Agree with employees any changes to terms and conditions of employment (rules for contractual changes apply to furloughed employees).
Any payments on termination of employment must be treated correctly for tax and national insurance purposes. In genuine redundancy situations the first £30,000 paid on termination of employment is tax free. Any excess is subject to income tax and employers’ national insurance.
A helping hand…
If you have queries about furlough, redundancy or tax payments please let us know. We’re here to help.
If you’d like support with employment law including furlough and redundancy talk to HR expert Serena Bower at Bower HR. She’ll guide you through the human resources maze.
Are you looking for new employees? Contact Samm Larkin from Neon Recruitment – she’ll help you to recruit the right bright sparks for your business.