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Coronavirus: Job Retention Scheme (Furloughing)


Introduction

The Coronavirus Job Retention Scheme aims to help businesses severely impacted by COVID-19 maintain their workforce by temporarily furloughing their employees.

Businesses furloughing their employees can claim a Government grant that covers up to 80% of each employee’s usual monthly wage cost up to £2,500 (plus the associated Employer National Insurance contributions and pension contributions at automatic enrolment employer contribution levels).

It is a temporary scheme, which the Government are currently advising will run until the 31st October 2020. It will be available in full for the period 1st March to the 31st July.

The Chancellor has announced that between August and October 2020 modifications will be made to the scheme including introducing an option for part-time furlough and introducing a mandatory employer contribution. Further details are expected by the end of May.


Important Information about Making A Claim

Businesses can submit their claims through an HMRC Portal (click here). Employers are able to backdate their claims to the 1st March.

Businesses will be required to submit key information including:

  • The bank account number and sort code for when the claim is paid.
  • The name and phone number of the person in your business who will respond to any questions.
  • The Self-Assessment UTR (Unique Tax Reference), Company UTR or CRN (Company Registration Number).
  • The name, employee number and National Insurance number for furloughed employees.
  • The total amount being claimed for all employees and the total furlough period.

    Advice for Businesses

     

    Any employees that were on your organisation’s PAYE payroll before 19th March 2020, regardless of their contract type, nationality or visa type.

    If you made an employee redundant or they stopped working for you after the 19th March 2020 your organisation can reemploy them, put them on furlough and claim 80% or their wages under this scheme.

    You cannot furlough employees that started working for your organisation after the 19th March 2020.

    Click here for a detailed guide to employees you can furlough from gov.uk.

    While furloughed, employees are not able to undertake any work for your organisation or any associated organisations. Employers may reallocate their work to employees who are not furloughed.

    While on furlough, the employee’s wage will be subject to income tax and other usual deductions.

    Employees must be furloughed for a minimum of 3 weeks.

    Employers should request their employee’s agreement to be furloughed in writing. A template letter is available from Acas (see below)

    When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.

    To be eligible for the grant employers must confirm in writing to their employee that they have been furloughed. A record of this communication must be kept for five years.

    For ACAS template letter, Click Here

    Claims are calculated from the date that the employee finished working and started furlough leave (not the date of the decision or the date that they were written to confirming their status).

    How furlough pay is calculated varies depending on the individual in question’s contract and status.

    For a detailed guide from gov.uk click here.

    No, provided you have your employee’s written consent to be furloughed at 80% of salary, topping up pay to 100% is a voluntary contribution.

    Note: With regard to apprentices, if the furlough payment is less than the appropriate minimum wage entitlement for the training hours, the employer will need to pay the additional wages to ensure at least the appropriate minimum wage is paid for 100% of the training time.

    Click Here For More Information


    Resources 

    For the official Government advice on the Coronavirus Job Retention Scheme:

    Click Here

    For an employer Q&A from the British Chambers of Commerce:

    Click Here

    For a detailed furlough
    Q&A for employers
    from CIPD:

    Click Here

    For advice from
    Acas on
    furloughing staff:

    Click Here


    Resources and Guides:

    Video

    Busting Myths about Furlough & planning for future with HR Dept. and Wildings Solicitors

    View Here

    Video

    McDonald's franchisee and Chamber patron Doug Wright answers questions on furloughing staff. Mr Wright was furloughed around 2,000 staff at his 20 McDonald's restaurants under the Government's Job Retention Scheme.

    View Here

    Video

    This video explores the latest advice on furloughing employees, insight into more Government support and other critical employment law considerations. It is led by Charlie Frost, Partner, Squire Patton Boggs and hosted by the Greater Birmingham Chambers of Commerce.

    Please note: this video was recorded on the 8th March and pre-dates the Government extending the duration of the scheme to the end of June and the cut off point for having employees on payroll to the 19th March.


    Get In Touch

    Has your business been impacted by Coronavirus? Contact your relationship manager or submit a message below:

    Coronavirus Support