UPDATE: 12th May 2020
The Chancellor has just announced that the Coronavirus Job Retention Scheme will be extended until October.
The level of support until the end of July will remain the same for workers who have been furloughed i.e. paid 80% of their monthly salary (maximum £2,500).
From the 1st August, the Government will look to share the costs of furlough with employers. Further details will be available by the end of May.
In these difficult times, we want to support you as much as possible. We, therefore, plan to send you updates on any major developments which will hopefully help your business.
The Government has announced the launch of the Coronavirus Job Retention Scheme (CJRS), designed so that HMRC reimburse 80% of the salary of PAYE employees (max. £2500 per month), who would otherwise have been laid off during this crisis.
Firms can top up this amount, but this is optional. The aim is to provide a basic income so that, when matters return to normal, your employees can be recalled, resuming their normal duties. It is not designed for employees who are still working, perhaps from home.
The scheme is open to any employers in the country and will be backdated to 1st March 2020. It should be open before the end of April and will continue for at least 3 months. Furloughed status, unless your contract allows temporary layoff or short-time hours, is going to need to be agreed with your employees and strictly speaking, requires a consultation process.
To claim under the scheme employers will need to:
- designate affected employees as ‘furloughed workers’, and notify 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; and
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. HMRC will set out further details on the information required.
- HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
Information, guidelines, and rules are changing rapidly, and you should seek independent confirmation before acting. The official Government web page is here, but we will keep you posted with any significant changes.
As always, if you would like to discuss anything please feel free to get in touch.