Further to the Chancellor’s announcement on Friday night, we want to bring you up to date with developments regarding the Coronavirus Job Retention Scheme which includes the new term ‘Furloughed workers’.
Some guidance has been put into place by the Government with regards to Furloughed workers and how the scheme will operate but it will take some time for the finer details to be agreed.
At the moment, we know the following details:
- The scheme is available to all UK businesses
- You will need to designate affected employees as ‘Furloughed workers’ and notify your employees of this change
- You will need to submit these employee details to HMRC via a new online portal (details on how to do this are yet to be released)
- HMRC will reimburse employers 80% of furloughed workers wage costs up to a cap of £2,500 per month. There is currently no system in place to make these reimbursements but HMRC have said that they are looking at this as a matter of urgency
- Furloughed workers cannot undertake any work for you during the time they are classed as Furloughed workers
- An individual cannot trigger becoming a Furloughed worker, this has to be determined by the employer
- The employer can top up the employee’s wage with the 20% balance, but they are not obliged to
- The Chancellor has announced it will be backdated to 1 March and is currently scheduled to run for at least 3 months, but this will be extended if required
- A new IT system needs to be put into place to run the scheme, but the Chancellor has said this will run into April before it is completed
Details where further clarity is required but is not yet available:
- Does the £2,500 salary cap include employer’s national insurance, pension contributions. benefits in kind, holiday pay etc?
- What is it 80% of?
- Does it mean that you can receive £2,500 per employee or is it 80% of £2,500 therefore £2,000?
- Does it just cover employees, or does it also cover workers?
- Can directors/shareholders make use of this scheme?
- Can the ‘Furloughed workers’ work for someone else?
Following the Furloughed workers announcement on Friday, there has been a large public response as to the apparent lack of support to compensate self-employed individuals. This has been acknowledged by the Government and further announcements on this are expected to be made early this week.
Even though the Government are putting steps in place to help those affected, there are still gaps in the information being received. We will be closely monitoring this, and we will be in touch as soon as further updates are made available.