Coronavirus Job Retention Scheme
21st April 2020The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least 4 months starting from 1 March 2020.
It is there to support employers whose operations have been severely affected by coronavirus (COVID-19).
Employers can claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.
Employers can use this scheme anytime during this period.
The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020, and the furloughed employees must have been on the payroll before this date. This has subsequently been extended for staff employed before 19th March 2020.
Claim for wage costs through the Coronavirus Job Retention Scheme.
How do I access it?
You will need to:
1. Designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
2. Now that the new online portal is live, submit information to HMRC about the employees that have been furloughed and their earnings.
When can I access it?
To make your claim, you will need to login to your HMRC Portal – https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme#how-to-claim.
We expect the first grants to be paid within the next 10 days – before the end of April.
If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan or other support measures.
What information will I need to make the claim
To make the claim, you will require:
1. The number of employees being placed under furlough
2. The dates employees have been under furlough to and from
3. Details of employees – the name and National Insurance Number of each furloughed employee
4. Your employer PAYE scheme reference number
5. Your Corporation Tax Unique Taxpayer Reference, Self-Assessment Unique Taxpayer Reference or Company Registration Number as appropriate for your entity
6. Your UK bank account details
7. Your organisation’s registered name
8. Your organisation’s address
Caveats
The scheme is to cover the costs of when staff are not able to work, either due to a downturn in trade or just logistically.
Furloughing staff is an amendment to their employment contract, and you need to demonstrate that they have agreed to this change – namely that the employer rights a letter to them explaining the position, and the employee signs to confirm.
Once the staff are under furlough, you should not ask staff to undertake any work for the company. We recommend communication is kept to a minimum, but as a good employer, you may wish to check up on their health.
If you staff are self-isolating or suffering with Covid-19 then they should fall into statutory sick pay instead of the Job Retention Scheme.
Directors are in a different position, as they have Statutory duties as director. Being under furlough is problematic as they then technically should not to undertake any work on behalf of the company, and therefore breach their directors’ responsibilities.
However, HMRC have confirmed that directors may be furloughed as long as they are not undertaking any work to generate income for the company. So undertaking administrative work is acceptable but not chargeable work.
