Thursday, 6th August 2020
It’s a new month and a new set of rules! Each month will see the introduction of small yet significant changes which will start to bring more control into the hands of the employer and a reduction to the payroll support offered by the Government.
KEY POINTS
- The claim window for the original furlough scheme has closed
- Claims for July payroll must be made by 31st August 2020
- Employers must contribute to wage costs
- September – it changes again!
How does this affect your August payroll?
The Original Furlough Scheme
The claim window for furlough periods ending up to 30th June 2020 has now closed.
If you have not submitted your claim for furlough support, then unfortunately you cannot make a claim.
Have you had extreme circumstances which have meant that you have been unable to submit your claim? There are no guarantees due to the circumstances. This is new territory for us all. However, contact us now and let us see if we can help you.
Furlough Claims – July 2020
From 1st July the furlough scheme changed to what we now know as the new flexible furlough scheme.
To benefit from this, employers must calculate the following, for each employee:
- Usual hours worked, under normal contract (A)
- Actual hours worked (B)
- Furloughed hours worked – the difference between A and B
Usual hours can be based on a normal salaried month, or for anyone on varied or zero-hour contracts it involves looking at an average of hours worked during the 2019/20 tax year.
Any claim for a claim period up to 31st July 2020 must be made by 31st August 2020. If your pay period straddles the calendar month then you must make 2 separate claims.
Not sure how to calculate the hours or how to process your claim in time, then give us a call!
Employer Contributions – The Rules for August
The main change to the rules is that Employers NI and Pension contributions will no longer be covered by the furlough claim scheme. All these costs must be paid by the employer regardless if the employee worked part-time or was completely furloughed.
In real terms the change means that employers will contribute a total of 5% of the payroll costs for furloughed employees.
Employers must continue to pay furloughed employees 80% of their wages up to a cap of £2,500 per month for the time that they are being furloughed.
As in the previous month, if your pay period straddles the calendar month, then you must make a separate claim for each calendar month.
Still baffled? Then contact us NOW! Any delay could cost you a significant amount of the CJRS grant that you may be entitled to.
What is in store for September?
The main change to the rules which came in for August is the amount covered by the government will be reduced to 70% up to a wages cap of £2,187.50 for the hours the employee is on furlough.
Employers must pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.
GET IN TOUCH WITH ONYX
Need help with your payroll or calculating the flexible furlough rates for your part-time staff?
Contact us now or e-mail us at enquiries@onyxaccountants.co.uk for a FREE no obligation consultation.
Got any questions or queries? Our friendly team of tax specialists are happy to help. Just drop us a line! Call us on 0121 753 5522 or 01902 759 800.
Keep up to date with the latest announcements by visiting our dedicated page https://onyx.accountants/covid/
