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The key elements are outlined below:
Flexible Furlough and holiday
The updated guidance confirms that employees should not be placed on furlough for a period simply because they are on holiday for that period.
Prior to this updated guidance, there had been some uncertainty as to whether an employer could place an eligible employee on furlough leave, solely to claim back a proportion of that employee’s holiday pay through the CJRS. The new guidance states that this would not be permissible under the CJRS.
This doesn’t mean that holiday can’t be taken during furlough leave and the guidance states that it can. Employees that are flexibly furloughed can take holiday and those hours can be counted as furloughed hours rather than working hours. Employers will be obliged to pay the additional amounts over the grant but will have flexibility to restrict when leave can be taken if there is a business need.
For any employees who are flexibly furloughed and are taking holiday, ensure that they are not required by the business during that time.
If a furloughed employee who is taking holiday is required by the business, their furlough leave period should be ended during their holiday.
For further information on holiday entitlement and pay during covid-19, click here.
Paying employee taxes and pension contributions
The updated guidance clarifies that employers must deduct income tax and National Insurance contributions on the full amount, including any scheme grant that is paid to the employee. The income tax and National Insurance contributions must be paid to HMRC and the payments reported via a Full Payment Submission to HMRC on or before the pay date.
This includes pension contributions (both employer and automatic contributions from the employee), unless the employee has opted out or stopped saving into their pension. Until 31 July you can continue to claim for these costs for the hours the employee is on furlough. From 1 August employers will not be able to claim for employer NICs and pension contributions.
Please see table below which outlines details the new furlough scheme responsibilities:
|Employer NICs and pensions contributions paid by?||CJRS||Employer||Employer||Employer|
|CJRS contribution to wages||80% up to £2,500||80% up to £2,500||70% up to £2,187.50||60% up to £1,875.|
|Employer contribution to wages||-||-||10% up to £312.50||20% up to £625|
|TOTAL||80% up to £2,500||80% up to £2,500||80% up to £2,500||80% up to £2,500|
If you have any questions regarding the flexible furlough scheme, redundancies or our HR support service fixed fee packages, please contact Lisa Aitken on 07960 469988 or email: LisaA@moore-tibbits.co.uk.