Coronavirus Job Retention Scheme
Jack Moore, who heads up our cloud accounting department, updates businesses on the help available from government with employee salaries.
As a result of the ongoing Covid-19 outbreak, many UK businesses are suffering both financially and operationally, with customer numbers reduced, staff being forced to self-isolate and stores and offices being forced to close nationwide. At Page Kirk, we understand the issues that you may be facing and we are firmly in your corner to make sure that you have all the information available to you to help you through this very difficult time.
If you have no choice but to lay people off as a result of the Covid-19 crisis, you should be able to access support under the Coronavirus Job Retention Scheme. All UK employers will be able to continue paying part of the salary for those employees who would otherwise have been laid off during this crisis.
How the scheme will work and how to access it:
Designate affected employees as 'furloughed workers' and notify your 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.
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. There are currently no details on how the payments for furloughed workers’ salaries will be made to employers, but we expect more information to follow over the coming days.
A furloughed worker is kept on an employer’s payroll rather than being laid off, but the Scheme is only intended to cover employees who would otherwise genuinely be required to be laid off as a result of the crisis. As such, the employee will remain employed but will not be allowed to undertake work for the employer for as long as they are furloughed. Additionally, it is at the employer’s discretion whether they fund the difference between the 80% covered by the Government and the employee’s full salary, but there is no requirement to do so.
HMRC are working urgently to set up a system for reimbursement. We expect the first grants to be paid within weeks, and HMRC are aiming to get it done before the end of April. If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.
If you need any more information or our help in making these claims please phone or email your usual Page Kirk contact, or alternatively contact us on 0115 955 5500 or email enquiries@pagekirk.co.uk.