The Chancellor has recently released more information on the Job Retention Scheme, so we want to try and make it clear to you how it may affect you

• - The scheme is open to all UK employers who had a PAYE scheme in place on 28th February 2020. The business does not have to be “essential”, nor does the employer have to demonstrate any financial hardship.
• - Employees on sick leave or who are self-isolating cannot be furloughed (presumably until they come off sick-leave/isolation). Employees who are shielding in line with public health guidance can be placed on furlough.
• - A furloughed employee cannot do any work whatsoever for their employer, even if it is voluntary.
• - Employers can claim the grant once every 3 weeks, not weekly.
• - Employers can claim 80% of wages costs up to a cap of £2,500 per month.
• - Employers can also claim for the associated employer National Insurance Contributions (NICs).
• - Furlough leave must be taken in a minimum of three week blocks.

For those on variable pay

• - For those employees whose pay varies on a weekly or monthly basis, the employer can use the following reference periods and claim the higher of:
  1. 1. The same month’s earnings from the previous year.
  2. 2. Average monthly earnings in the 2019/2020 tax year.

Consent

• - Any decision to furlough employees must be discussed with the employee, as well as any changes to working hours and pay. Employers must write to their employees confirming they are being furloughed.

Timing

• - It is expected that the HMRC portal will be up and running at the end of April. Where possible, employers should fund salaries in the meantime and then claim back the cost.
• - Coronavirus Interruption Loans are available for employers who cannot do this (for more information on this, see your bank).

Support for the self-employed

• - The Chancellor has also announced a scheme to help those who are self-employed:
  1. 1. First payments under the grant will not be released until June.
  2. 2. HMRC will take an average of profits from the last 3 years tax returns as a self-employed person, and pay 80% of the average.
  3. 3. HMRC will contact all eligible individuals.
  4. 4. The self-employed person must have submitted a 2019 tax return, but late tax returns will be accepted for the next 4 weeks (as of 27th March 2020).

For any queries visit https://www.gov.uk/coronavirus