Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salaries for those employees that would otherwise have been laid off during this crisis.
What it means:
- HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
- HMRC is working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
- The scheme, lasting for an initial period of three months, will be extended “if necessary”.
- The employer can choose whether to top-up the remaining 20% of employees’ pay.
- The wage subsidy will apply to workers who have already been laid off since 1st March, due to the pandemic, provided the employer brings them back onto the payroll.
- The scheme is to help employers keep their staff on the books, rather than lay them off. It isn’t targeted at the self-employed.
You will need to:
- Designate affected employees as ‘furloughed workers,’ and notify your employees of this change. To ‘furlough a worker’ means that you have laid them off due to no work, but you have not yet made them redundant. 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).