Coronavirus Job Retention Scheme
What is it? The Government will pay a grant to cover 80% of furloughed workers’ wage costs, up to a cap of £2,500 per employee per month. The retention grant is to help employers meet the wage costs of employees who are not working without having to make redundancies. The employer is not required to top this grant up.
The scheme will be backdated to 1 March 2020 and open for at least 3 months but will be extended if required, with the overall fund for making the payments being unlimited. The scheme will be available for all employees currently paid via PAYE and we understand it will include a mechanism to address the position of zero-hours workers and other employees who may not be entitled to receive standard rates of pay.
Can I apply? All UK employers, irrespective of business size or sector.
How do I access? By application to HMRC, who will also administer payment. Employers are required to designate affected employees as ‘furloughed workers’ and notify the employees of this change. Businesses will then submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal.
What next? Detailed guidance is due shortly. HMRC are working to get the scheme up and running as soon as possible but recognise their existing systems are not set up to facilitate payments to employers. The aim is that the first grants will be paid within weeks and before the end of April, however, businesses should recognise there may be a funding gap between the payment of wages and the eventual receipt of the grant which they could be required to finance, particularly during the initial rollout of the scheme.
For Government Guidance Link: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses