From 1 September, HMRC are reducing how much can be claimed for your furloughed employees wages, using the Job Retention Scheme.

As of 1 August, employers were eligible to bring furloughed employees back to work on a part time basis. Businesses were given the flexibility to decide the hours and shift patterns for their employees, with the job retention scheme still paying 80% for the hours that have not been worked.

From 1‌‌ September HMRC will no longer pay 80% of usual wages, they will now pay 70% of usual wages up to a cap of £2,187.50 per month for the hours furloughed employees do not work.

As an employer you need to –

  • Continue to pay your furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. The additional top up from the 70% claimed, needs to be funded by you.
  • Continue to pay furloughed employees’ National Insurance and pension contributions from your own funds.

From 1 October, HMRC will then reduce the amount eligible to be claimed to 60% of wages up to a cap of £1,875 for the hours the employee is on furlough. Employers will continue to pay employer national insurance and employers pension contributions.

As well as, topping up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.

The job retention scheme will come to an end on 31 October 2020. If you would like further guidance on the Job Retention Scheme, please click here. Alternatively, contact the HMRC website direct here.