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Coronavirus Job Retention Scheme
26th March 2020
Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll, but are temporarily not working during the Coronavirus outbreak.
Any employer in the country, small or large, charitable or non-profit, will be eligible for the scheme.
Details so far include:
- The Government will pay up to 80% of workers’ pay, up to a maximum of £2,500 a month;
- Employers can contact HMRC to obtain a grant to subsidise pay for workers who are not working due to Coronavirus, although further definition of this is yet to be released;
- The scheme is stated to cover all workers paid through PAYE, so potentially not just employees; and
- The scheme will cover the cost of wages backdated to 1st March 2020 and for at least three months going forward.
- In addition, no limit has been placed on the amount of money available.
- The Chancellor confirmed that the scheme would apply across the whole of the UK, including Scotland.
The measures have been widely welcomed - although the government is being pressured to consider further intervention to help self-employed people.
What employers need to do
Employers will need to designate affected employees as furloughed workers, and notify their employees of this change.
They must note that changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation. This means that in the absence of any contractual rights to the contrary, employers would be wise to seek agreement from staff about furloughing before doing so.
They will then need to 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 in the coming days.
It is expected that the payment of grants will be made within weeks and hopefully by the end of April.
To view Government guidance on the Job Retention Scheme HERE