If you have been ‘furloughed’ then the new Coronavirus Job Retention Scheme may be able to help. If you are furloughed it essentially means that your employer has given you a temporary leave of absence or a type of sabbatical to help cope with the economic turmoil resulting from COVID-19. If you are on furlough, then you should be at home and not working. However, you remain technically employed.
The new scheme sees the government cover up to 80% of wage costs, up to a cap of £2,500 per month per employee. HMRC have set up a system for reimbursement and the first grants are expected to be paid in the coming weeks. The scheme was initially due to run for at least 3 months, backdated from 1 March 2020, but has now been extended to the end of June. The government has not placed any limit on the funds to be provided using this scheme, but the costs will run into the billions each month the scheme is operational.
The use of this scheme is designed to encourage employers to avoid making people redundant and to help avoid significant financial hardship for individuals who have unfortunately been furloughed. Your employer could choose to fund the differences between this government payment and your salary but is under no obligation to do so.
If your salary is reduced as a result of these changes, you may also be eligible for further welfare support. These grants are only be available to PAYE workers and consequently does not apply to gig workers or those on zero-hours contracts. There will be various safeguards in place to ensure that this scheme is not subject to abuse.
To apply, you will require the following:
- The bank account number and sort code you’d like to use when we pay your claim.
- The name and phone number of the person in your business for us to call with any questions.
- Your Self Assessment UTR (Unique Tax Reference), Company UTR or CRN (Company Registration Number).
- The name, employee number and National Insurance number for each of your furloughed employees.
- The total amount being claimed for all employees and the total furlough period.
Please bear in mind the following important points when applying:
- The date on which employees can be placed on furlough has been changed to 19 March 2020. This means that employees who were on the PAYE payroll of their employers on or before 19 March 2020 will be eligible to receive support through the Coronavirus Job Retention Scheme. The original eligibility date was 28 February 2020. The new date is fixed at the day before the scheme was originally announced by the Chancellor and is therefore unlikely to be changed again to protect the government against fraudulent claims.
- Employees who were employed as of 28 February 2020, and on payroll, who were made redundant or stopped working for the employer after that and prior to 19 March 2020, can also qualify for the scheme if they are re-employed and placed on furlough.
- It has been confirmed that the online claim service for the Coronavirus Job Retention Scheme will be launched on Monday 20 April 2020. The only way to make a claim will be online.
It is expected that claims will be paid within six working days. HMRC have requested that you do not contact them unless absolutely necessary.