Update 28 March 2020
Coronavirus Job Retention Scheme for Employers
The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020. The government expects the scheme to be up and running by the end of April 2020. It is designed to support employers who operations have been severely affected by coronavirus (COVID-19).
Businesses who are eligible
Any UK organisation with employees can apply, including:
- Businesses
- Charities
- Recruitment agencies (agency workers paid through PAYE)
- Public authorities
You must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.
Employees who are eligible
Furloughed employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract, including:
- Full-time employees
- Part-time employees
- Employees on flexible or zero-hour contracts
To be eligible for the subsidy, when on furlough, an employee can not undertake work for or on behalf of the organisation.
Employer National Insurance and Pension Contributions
All employees remain liable for associated Employer Insurance contributions and minimum automatic enrollment employer pension contributions on behalf of their furloughed employees.
You can claim a grant from HMRC to cover wages for a furloughed employee, equal to the lower of 80% of an employee’s regular salary or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrollment employer pension contributions on paying those wages.
Work out what you can claim
Employers need to make a claim for wage costs through this scheme.
At a minimum,employers must pay their employee the lower 80% of their regular wage or £2,500 per month. An employer can also choose to top up an employee’s salary beyond this but not obliged to under this scheme.
I will issue more guidance on how employers should calculate their claims for Employer National Insurance Contributions and minimum automatic enrollment employer pension contributions, before the scheme becomes live.
Full-time and part-time employees
For full-time and part-time salaried employees, the employee;s actual salary before tax,as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.
Employees whose pay varies
If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either:
- The same month’s earning from the previous year.
- Average monthly earnings from the 2019-20 tax year.
If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.
What you’ll need to make a claim
Employers should discuss with their staff and make any changes to the employments contract by agreement. Employers may need to ask to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment.
To claim, you will need:
- Your ePAYE reference number.
- The number of employees being furloughed.
- The claim period (start and end date).
- The amount claimed (per the minimum length of furloughing of 3 weeks).
- Your bank account number and sort code.
- Your contact name.
- Your phone number.
You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.
Update 6 April 2020
The government is committed to doing whatever it takes to support businesses and individuals through the Coronavirus pandemic. On 20 March as part of these efforts the Chancellor announced the Coronavirus Job Retention Scheme.
This funding will be open to all employers with a PAYE payroll scheme that was created and started on or before 28 February 2020, including charities. Employers can apply for grants of 80% of furloughed employees’ (employees on a leave of absence) monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrollment employer pension contributions on that wage, provided they keep the worker employed. The scheme will cover the cost of wages backdated to 1 March 2020, if applicable.
HMRC have been working night and day to develop this scheme, and we can now confirm that we have been able to publish further details of the scheme on GOV.UK. We are aiming to have the scheme up and running by the end of April 2020. More detailed guidance will be published in due course and please be assured we will advise you when the scheme is open.
Guidance for employers is available on
https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
You may also find this helpful.
https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme
We recommend you view the guidance which will be updated as the scheme is further developed, and in line with any further government announcements.
In the meantime, we will continue to keep you informed to ensure that you have access to the assistance you need.
Update 8 April 2020
The Coronavirus Job Retention Scheme (CJRS)
In response to the coronavirus pandemic, the Chancellor announced a series of measures to support businesses and their employees. One of those measures is the CJRS, that allows employers to claim 80% of the wages of staff (up to a maximum of £2,500 per employee) that they have furloughed (been put on temporary leave).
HMRC is working at pace to deliver the service that will allow businesses to make a claim. Businesses, and agents that are authorised to act on behalf of clients for PAYE matters, will be able to claim. However, file only agents, including Payroll Bureaus, will not be able access the service due to data protection reasons.
File only agents
If you are a file only agent, we still need your support. You will need to help your clients, as you might hold information that they need to make their claim. Businesses will need the following information on each of their furloughed employees:
- National Insurance number
- Salary
- National Insurance
- Pension contribution information that allows business to calculate the claim amount.
Service launch
We are ready to launch on 20 April. This will be made public shortly, at which point we will be contacting businesses to advise them what they need to do. At this point we would welcome you also contacting your clients and offering yourselves as vital support during this process, either directly, if authorised, or indirectly if you are a file only agent.
We are expecting phone demand to be beyond our capacity to offer a normal service. Therefore, the service is designed to be self-serve with guidance in place. Again, your support in helping us achieve this is called on.
Update 14 May 2020
The Chancellor has announced that the Job Retention Scheme (JRS), a lifeline for an estimated 7.5 million employees across the UK, has been extended from 30 June 2020 to 31 October 2020.
This is welcome news for almost one million businesses across the UK who have relied on the scheme to pay salaries, retain their staff and keep their businesses going in these very challenging times.
While there will be no changes to the existing scheme until 31 July 2020, the Chancellor also announced measures to make the scheme more flexible over the coming months, to help ease people back into the workplace. Therefore, from 1 August 2020, furloughed employees will be able to return to work on a part-time basis and from that date, employers will be asked to contribute to the cost of paying their furloughed employees’ wages although details have not been released yet about how much the employer contribution will be. Please note at the moment for Scotland we are still being told to stay at home but hopefully by 1st August we will be encouraging furloughed workers to return to work part time.
For the duration of the scheme, employees will continue to receive 80% of their current salary, up to £2,500.
Full details of the additional measures will be published at the end of May and I will keep you informed on the further details as they emerge.
Given it is likely that most businesses will continue to access much needed cash flow by continuing to make a JRS claim in the months ahead, it is very important that businesses ensure their claims are properly prepared in accordance with the rules.
Finally if you need to have a chat with me please contact me. I can do zoom calls, FaceTime or just the normal phone call. Don’t bury your head in the sand, talk to me, and stay safe.
Update 9 July 2020
Yesterday the Chancellor announced the introduction of the Job Retention Bonus. A welcome boost to small businesses.
This is a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31 January 2021. The bonus will provide additional support to retain employees.
To be eligible, employees will need to:
- earn at least £520 per month (above the Lower Earnings Limit) on average for November, December and January
- have been furloughed at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
- have been continuously employed up until at least 31 January 2021.
Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31 January has been received. More information about this scheme will be available by 31 July and I will bring you up to date with information as soon as I know about it.
Other new measures announced
The Chancellor also announced other measures, including:
the Eat Out to Help Out Scheme – during August, diners can get 50% off Monday to Wednesday on meals and non-alcoholic drinks, up to £10 per person, when eating at participating restaurants, bars, cafes and other establishments that have registered.Businesses that want to take part in the scheme will have to register through a website that opens on Monday 13 July.
VAT reduction – from 15 July until 12 January 2021, the UK government will cut VAT from 20% to 5% on any eat-in or hot takeaway food and drinks from restaurants, cafes and pubs, excluding alcohol. This VAT reduction also applies to all holiday accommodation in hotels, B&Bs, campsites and caravan sites, as well as attractions like cinemas, theme parks and zoos
And for my clients based in England and NI, an increase in the Stamp Duty Land Tax (SDLT) threshold – increasing the threshold under which no SDLT is paid on the purchase of a main home from £125,000 to £500,000, with immediate effect until 31 March 2021.
WEBINAR
I have a new webinar scheduled for Monday 27th July and I’m trialing a new time of 7pm. So many people have said during the day is difficult for them so hopefully this time will help.
The webinar will be interactive and I’ll be talking about value and price.
Click here to register for the webinar.