What is it?
Under the Coronavirus Job Retention Scheme, all UK employers with a PAYE scheme that was created and started on or before 28 February 2020, 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 pay roll, otherwise described as ‘furloughed workers’.
HMRC will pay employers a grant worth 80% of an employee’s usual wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. This is to safeguard workers from being made redundant. The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st if applicable and is initially open for 3 months, but will be extended if necessary.
Am I eligible?
All UK-wide employers with a PAYE scheme that was created and started on or before 28 February 2020 will be eligible including:
Recruitment Agencies (agency workers paid through PAYE),
The employer must have a UK bank account.
How do I access it?
You will need to:
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.
Once the new online portal is live, submit information to HMRC about the employees that have been furloughed and their earnings.
When can I access it?
HMRC are working urgently to set up a system to pay these grants. We expect the first grants to be paid within weeks, and we’re 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.