Coronavirus Job Retention Scheme
20th March 2020
The Coronavirus Job Retention Scheme is to be a Government grant which reimburses employers for up to 80% of furloughed workers wage costs capped at £2,500 per month.
it has been announced that the scheme will be backdated to 1 March 2020 and will be open in the first instance for 3 months but longer "if necessary".
The chancellor announced that there will be no limit to the funding available for the scheme and they will pay grants to support as many jobs within the UK economy as possible.
All UK businesses are eligible (this includes not-for-profits and charities) and the scheme wil be administered by HMRC.
Employers will need to:
- ensure their affected employees are categorised as ‘furloughed workers’; and
- submit the information on the affected employees to HMRC, together with details of their earnings, through a new online portal.
It is important to note that the above is a GRANT and therefore the employer will need to make the salary payment as usual and then be reimbursed by HMRC.
We do not have a confirmed start date but in his statement the Chancellor announced that "HMRC are working urgently to set up the new system" and that they are "working night and day to ensure the scheme is up and running as soon as possible, they expect the first grants to be paid within weeks".
Where a business can carry on without those physical interactions, for instance by working remotely, it should be business as usual and the policy doesn’t appear to be designed as a catch all wage subsidy for the UK workforce.
There are a number of key questions that we are still awaiting guidance on. These include irregular earnings and zero hour contracts, whether you can furlough an employee and whether this has any legal implications, whether a furloughed employee can return to work, whether an employee can be furloughed when just partially employed due to a reduced workload, whether the employer has to cover the additional 20% or pay any amounts over the capped limit of £2,500, whether amounts paid under the scheme are still liable for PAYE and NI and whether employees terminated post 1 March can be re-hired and qualify for CJRS.
There are many questions that remain unanswered, please speak to us if you require further information.