Job Retention Scheme
UPDATE 15.4.20 from HMRC
Help for employees caught between a rock and a hard place regards furlough eligibility.
The government has extended the start date for eligibility for furlough to 19 March from original of 28th February. Employers can claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020.
This means that the employee must have been notified to HMRC through an RTI submission notifying payment in respect of that employee on or before 19 March 2020.
This change makes the scheme more generous while keeping the substantial fraud risks under control and is expected to benefit over 200,000 employees.
Contact us if you need clarification or to amend any submissions
UPDATE 9.4.20 from HMRC
If you’re eligible for the scheme, there are things that you can do now to be ready when the system is up and running later this month.
You’ll need to provide the following to make a claim:
- The bank account number and sort code you’d like us to use when we pay your claim.
- The name and phone number of the person in your business for us to call with any questions.
- Your Self-Assessment UTR (Unique Tax Reference), Company UTR or CRN (Company Registration Number).
- The name, employee number and National Insurance number for each of your furloughed employees.
- The total amount being claimed for all employees and the total furlough period.
If you use an agent who is authorised to act for you for PAYE purposes, they will be able to make a claim on your behalf, so please speak to them now.
However, if you use a file-only agent (files your RTI return but doesn’t act for you in other matters), they won’t be able to make a claim for you and you’ll need the information listed above from them to make the claim yourself.
For more detailed advice, please visit GOV.UK. This guidance is being regularly updated, so please review it frequently.
You may also find this recorded webinar helpful, 'Coronavirus (COVID-19) Job Retention Scheme', available on HMRC’s YouTube channel.
MORE DETAILS WILL FOLLOW AS TO WHEN SCHEME IS OPEN
We now have more detail on the Job Retention Scheme and thought it might useful to employers planning to use this scheme. One thing to remember is that this is a grant and not a loan so we would encourage you to consider this scheme to help keep your business viable for when after the crisis is over.
Employees placed on furlough may be able to have 80 percent of wages paid through the scheme up to a monthly limit of £2,500
However, furloughed employees must not undertake any work or services that results in making money for the business. You might ask them to undertake training during the furlough period but you should pay them in line with the national minimum wage for the training time. Even if this payment is above the 80 percent figure.
Furlough is for a minimum of 3 weeks and maximum 3 months but be aware that the maximum may be extended. A furloughed employee coming back to work can be re-furloughed. Employees will still pay Income Tax, National Insurance and any other deductions from their wages.
You will need to submit claims on behalf of employees. These employees must have been on your payroll from at least 28 February 2020. All employees are eligible to benefit from the grant, including those on zero-hour or temporary contracts. For those who are on general sick-leave, or are isolating in line with government guidance, they should receive statutory sick pay for this period and then be furloughed after this.
The grant will cover the period from the day employees are furloughed and will be backdated until 1 March 2020
Employees who were made redundant after 28 February can be re-employed and placed on furlough instead. The grant will still cover their wages for this period of time. Additionally, any employee placed on furlough can still be made redundant. They can also be made redundant if they refuse to go on furlough. However, usual rules on redundancy will apply.
For employees currently on family leave, such as maternity, adoption or paternity leave, they should receive statutory rates as normal and usual rules surrounding the taking of this leave should apply. As a reminder, statutory family leave is currently £151.20.. If your client provides enhanced pay to workers taking family leave, they can claim for the money to cover the additional amount through the scheme. For employees who are due to start family leave, they should do so as usual. If they have been placed on furlough or sick pay in the lead up to this, it may affect the amount of statutory pay they are entitled to.
We hope this gives you some more clarity but as always, we are here to assist both you and your HR department or advisor with any financial aspects of the Job Retention Scheme.