It will take the form of a grant to cover 80% of wages (up to £2,500 per month), for employees who are not working due to the impact of Coronavirus but are retained on the payroll.
The 80% is based on the higher of (i) the earnings in the same pay period in the previous year; or (ii) the average earnings in the previous 12 months (or less, if the individual has worked for less time).
Should businesses wish to top up the additional 20% of salaries they can.
The scheme will be backdated to 1st March 2020 and will be open initially for a three-month period and will be further extended if necessary.
Employees taken on after 1st March 2020, are excluded from the scheme.
Businesses can re-employ people who have been made redundant since 1st March, and then furlough them.
To claim the grant businesses should 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. To be eligible for the subsidy employers should write to their employee confirming that they have been furloughed and keep a record of this communication.
An employee must be furloughed for a minimum of three weeks. They can then come off furlough. This means that employers cannot rotate staff weekly between furlough and non-furlough.
Employees on furlough leave, can do volunteering or training, providing it does not generate any money for their employer.
Businesses will submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal. The online service you’ll use to claim is not available yet. We expect it to be available by the end of April 2020. HMRC will set out further details on the information required. In the meantime, more information can be found here.
Once HMRC has received your claim and you are eligible for the grant, they will pay it via BACS payment to a UK bank account.
You should make your claim in accordance with actual payroll amounts at the point at which you run your payroll or in advance of an imminent payroll.
You must pay the employee all the grant you receive for their gross pay, no fees can be charged from the money that is granted.
Should you have any concerns regarding the Coronavirus Job Retention Scheme please contact Shona Duncan.
