As the economic effects of the ongoing coronavirus pandemic continue to be felt, as of 20 April, applications for the UK government’s Coronavirus Job Retention Scheme – announced back in March – can be made.
Its aim is to avoid redundancies, and the scheme can offer grants of up to 80% of an employee’s wage for all employment costs – up to a cap of £2,500 per month.
Here’s everything you need to know about it:
How does the Coronavirus Job Retention Scheme work?
Under the Coronavirus Job Retention Scheme, UK employers will be able to access support to continue paying part of their employees’ salaries for those employees that would otherwise have been laid off during the crisis.
Which businesses are eligible?
To claim help through the Coronavirus Job Retention Scheme, you must have created and started a PAYE payroll scheme on or before 19 March 2020, enrolled for PAYE online and have a UK bank account.
Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities.
To check who is eligible for the scheme, more information can be found on the Government’s website.
When can I apply?
Applications for the scheme opened on Monday 20 April.
Speaking to BBC Breakfast, Jim Harra, chief executive of HM Revenue & Customs, said he was "confident" the system running the Government's scheme would work.
"There is a limit to the capacity of the system," he said, "so if every employer tries to use it at 8 o'clock this morning some will be asked to queue or come back later, that doesn't mean the system has crashed, it simply means that it's full.
"But employers can claim any time over the few days, between now and Wednesday, and we will have the money in their bank account by April 30."
Mr Harra said the Coronavirus Job Retention scheme system had been tested at "up to 450,000 claims per hour".
How can my business access the scheme?
You will need to:
- designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month and is working urgently to set up a system for reimbursement.
Existing systems are not set up to facilitate payments to employers.
If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.
What do employees need to do?
If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker.
This would mean that you are kept on your employer’s payroll, rather than being laid off.
To qualify for this scheme, you should not undertake work for them while you are furloughed.
This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.
You will remain employed while furloughed.
Your employer could choose to fund the differences between this payment and your salary, but does not have to.
If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system, including Universal Credit.
How long will the Coronavirus Job Retention Scheme run for?
The original intention was for the Coronavirus Job Retention Scheme to run at least until the end of June 2020, but now Chancellor of the Exchequer Rishi Sunak has extended the furlough scheme to the end of October.
This time frame will be extended if the government deems it necessary.
For more information on the Coronavirus Job Retention Scheme, head to the government’s website
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