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What do the latest changes to the Coronavirus Job Retention Scheme (CJRS) mean for my firm?

The chancellor has announced that companies will need to start contributing to the Coronavirus Job Retention Scheme (CJRS) from August 2020.

The changes, which will be phased in between now and October, are as follows:

Changes from August 2020

From 1 August 2020, the level of government support available through the CJRS will be reduced and businesses will be asked to contribute what the government describes as a ‘modest share’ towards the wage bill. The government hasn’t announced what this share will be yet.

Employers will also be responsible for paying employer National Insurance Contributions (NICs) and pension contributions at the usual rate (3% for employers and 5% for employees).  Employers will no longer be able to claim a grant for up to the statutory minimum automatic enrolment (AE) employer contribution.

Employees will continue to receive 80% of their salary.

Changes from September 2020

From 1 September 2020, the government will cover 70% of wages up to a cap of £2,187.50, with employers asked to pay the remaining 10% of wages up to a cap of £2,500, plus employer NICs and pension contributions.

Changes from October 2020

From 1 October 2020, the government will cover 60% of wages up to a cap of £1,875, with employers asked to pay the remaining 20% of wages up to a cap of £2,500, plus employer NICs and pension contributions.

The CRJS will close to new entrants from 30 June. After that, employers will only be able to furlough employees who’ve already been furloughed for the full three weeks prior to 30 June.

The scheme will come to an end on 31 October 2020, as planned.

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