The UK Government has provided the Coronavirus job Retention Scheme, with news of a second lockdown, this has been extended until April 2021.
Here’s an update for the scheme:
- The scheme has been extended until the end of April 2021, with employees receiving 80% of their wages
- Employers small or large, charitable or non-profit, are eligible for the extended Job Retention Scheme, which will continue for a further month.
- Businesses will have flexibility to bring furloughed employees back to work on a part time basis or furlough them full-time, and will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.
- The Job Support Scheme, which was scheduled to come in on Sunday 1st November, has been postponed until the furlough scheme ends.Additional guidance will be set out shortly.
Flexible furlough scheme:
- A flexible furlough scheme will be in place from the 1st July
- Employers will have full flexibility to decide the terms of their employees’ furlough
- For example, employers can decide to bring employees into work two days a week, and then furlough them for three days a week
Self-employed income support scheme:
- The self-employed can apply for a second and final grant in August
- The grant will work in the same way as the first one, paid out in a single instalment, covering three months’ worth of average income
- The value of the final grant will be 70% up to a total of £6,570
Here are some answers to questions we have received regarding the furloughing of employees.
What does it mean?
Furlough describes employees who have been asked to stop working, but who are being kept on the pay roll.
How does it affect my business?
It affects your business if employees will have been otherwise laid off during the crisis. In this case, employees can be maintained on the pay roll, and expenditure reduces during that period.
What government support is available?
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month per employee.
How can I access government support as a business owner?
To access government support, business owners will need to designate affected employees as ‘furloughed workers,’ and notify your employees of this change. The changed status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
The next stage is to submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal being set up by HMRC.
HMRC will then reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
Are staff who were taken on after 19th March covered?
Staff who were hired or contracted after 19th March are not covered by the scheme.
You may choose to furlough them to protect their employment status and to provide them with certainty about their job at the end of the crisis, but you may not make a claim to recover their salary or employment costs.
For these workers, you may choose to furlough at a reduced set our hours or salary or even on the basis of no pay or you may choose to make a payment to them, this measure will simply protect their job and ensure that they are retained by you.
These workers would still be eligible for enhanced Universal Credit and housing benefit support.
Can staff are not working when they are furloughed? What about other employers?
Any staff that are furloughed should not undertake any work for you during the period, but an employee may have multiple jobs and may be furloughed by all workers or only some.
The fact that an employee remains working for another employer during a furlough period will not invalidate your furlough claim.
For staff paid hourly, how do I work out what a standard week is or what 80% is?
That will be determined by what is in the employee’s contract of employment and what they have been paid.
In the absence of an employment contract, consider using the records for the last 12 weeks.
Add up how many hours they worked in total and divide by the number of weeks to produce an average weekly salary.
That is a starting point for the discussion with your worker about what you will pay them during their furlough.
What you’ll need
To make a claim, you will need:
- to be registered for PAYE online
- your UK bank account number and sort code (only provide bank account details where a BACS payment can be accepted)
- the billing address on your bank account (this is the address on your bank statements)
- your employer PAYE scheme reference number
- the number of employees being furloughed
- each employee’s National Insurance number (if you have one or more without a National Insurance number please contact HMRC)
- each employee’s payroll or employee number (optional)
- the start date and end date of the claim
- the full amount you’re claiming for including employer National Insurance contributions and employer minimum pension contributions
- your phone number
- contact name
You also need to provide either:
- your name (or the employer’s name if you’re an agent)
- your Corporation Tax unique taxpayer reference
- your Self Assessment unique taxpayer reference
- your company registration number
Useful links:
https://www.businesssupport.gov.uk/coronavirus-business-support/
https://www.businesssupport.gov.uk/coronavirus-job-retention-scheme/
