Under the Coronavirus Job Retention Scheme, all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis.
This applies to employees who have been asked to stop working, but who are being kept on the payroll, otherwise described as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month in the form of a grant. This is to safeguard workers from being made redundant and will be subject to the usual employment law in force.
The Coronavirus Job Retention Scheme will cover the cost of wages backdated to 1 March 2020. The scheme will last for at least 3 months and may be extended by the Government if necessary. It will be available for employees who were on an employers payroll scheme on 29 February 2020. Furloughed employees must NOT carry out any work including answering phone calls or replying to emails.
To access the scheme, employers will need to identify and designate relevant staff as furloughed workers. The employer needs to get agreement from the worker to do this, unless it’s covered by a clause in the employment contract. The employer can decide who to designate as a furloughed worker. Furlough agreements should be made in writing. We have provided a “Furlough Agreement” template to assist with this below. HMRC will provide a new online portal for employers or agents to submit the information. The employee will be paid through the employers payroll scheme via Real Time Information (RTI).
If employers still require short term cash flow support, they may be eligible for a ‘Coronavirus Business Interruption Loan’. We will be advising further as more information is released by HMRC.
Additional information can be found here:
Please note this is the guidance as we understand at the time of the announcement. As you are aware, the information is changing on a daily basis and we cannot be held responsible if the advice or guidance changes or if our interpretation does not subsequently prove to be correct.