28th March 2020 Posted by - Alexander Accountancy
Coronavirus Job Retention Scheme
What is it?
(First published March 25, 2020)
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 pay roll, otherwise described as ‘furloughed workers’. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant. The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st and is initially open for 3 months, but will be extended if necessary.
Am I eligible?
All UK-wide employers with a PAYE scheme will be eligible – this includes the public sector, Local Authorities and charities.
How do I access it?
You will need to:
1. 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.
2. Once the new online portal is live, submit information to HMRC about the employees that have been furloughed and their earnings (HMRC will set out further details on the information required)
When can I access it?
HMRC are working urgently to set up a system for reimbursement. 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.
