Coronavirus Job Retention Scheme

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Jayne Turner | 23rd March 2020

Coronavirus Job Retention Scheme

On Friday 20 March the government announced its Coronavirus Job Retention Scheme to reimburse employers 80% of wages paid to furloughed workers backdated to 1 March. Full details have not yet been provided on how this will work, but here is what we know so far.

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.
 
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)
At the moment we believe that this will only apply to those workers who have been furloughed i.e those who are not working, and will not apply to those where hours have been reduced.
 
We are also not yet aware of what salary information HMRC will require providing with in order to process these but we anticipate this being historical information to evidence amount of salary/wages.
 
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement to employers. 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.
 
As soon as we have details of how the scheme will work we will make it available on our website.
 
Government guidance for employers and businesses is here.
Details of support for businesses and employers is here.