Coronavirus Job retention scheme (CRJS)
The Coronavirus Job Retention Scheme went live on the 20th April, with businesses able to claim up to £2,500 a month towards staff wages.
Access the online portal HERE
- any large or small employer can apply to put workers on temporary leave or “furloughed” status. The government will then pay them cash grants of 80 per cent of their wages up to a cap of £2,500, providing they keep the worker employed.
- they will receive the grant from HMRC. All UK organisations can self-certify that it has furloughed employees. The scheme will cover the cost of wages backdated to March 1. All UK-wide employers with a PAYE scheme will be eligible, including the public sector, local authorities and charities.
- the scheme has been extended until the end of June. But we will extend it for longer if necessary. There is no limit on the amount of funding available for the scheme.
- we expect the first grants to be paid within weeks. HMRC are working night and day to get the scheme up and running and we’re aiming to get it done before the end of April. Existing systems are not set up to facilitate payments to employers.
HMRC have produced a step by step guide which explains the information that employers need to provide to HMRC to make a claim through the Coronavirus Job Retention Scheme. You can find it at .GOV HERE
Please note that if you are an employer making a claim, you need to follow the processes explained in the guidance page Claim for your employees’ wages through the Coronavirus Job Retention Scheme on GOV.UK.
Do individuals still have to pay tax on this?
Yes – individuals will pay Income Tax and National Insurance on any payments received through this scheme as they are replacement for income in line with normal practise for benefits or grants that replace income.
Will this cover the cost of employer National Insurance contributions and employer pension contributions?
Yes – employers will be able to apply for a grant to cover the Employer National Insurance contributions and minimum automatic enrolment pension contributions on paying the lower of 80% of regular salary or £2,500 per month.
How will this work for those on zero-hour/flexible contracts/agency workers?
This scheme aims to support all those employed through the PAYE system regardless of their employment contract, including those on zero-hour contracts or agency workers. Zero-hour and flexible contracts can cover a whole range of working arrangements.
The 80% grant is applied to the higher of: (1) the earnings in the same pay period in the previous year; or (2) the average earnings in the whole previous 12 months (or fewer if they have worked for less time than this, including a part month calculation if they were taken in February).
Can a business furlough someone after hearing the announcement and then claim back to March 1st even though they had been working that whole time?
No – the scheme is backdated to March 1st with a view to covering those who have already been made redundant as a result of the coronavirus.
What about employees taken on after 19 March?
All UK-wide employers with a PAYE scheme on the 19 March are eligible for the Coronavirus Job Retention Scheme, which is aimed at supporting workers affected by the outbreak of Covid-19. This means that the employee must have been notified to HMRC through an RTI submission notifying payment in respect of that employee on or before 19 March 2020.
The cut-off point has changed from the original date of 28 February to 19 March (the day before the announcement was made), following a review. This change makes the scheme more generous while ensuring that fraud risks are kept under control.
If an employee was not on a PAYE scheme on the 19 March 2020, they are still eligible for support including an increase in the Universal Credit allowance, Employment Support Allowance from Day 1 if they are unable to work due to Covid-19 and an extension of Statutory Sick Pay to those self isolating.
To qualify, does the business need to be ‘essential’?
No, all businesses which employ and pay workers through the PAYE system are eligible.
Why are you not supporting me if my hours are reduced?
- The scheme is designed to help those who otherwise would have been made unemployed.
- The Government recognises that some people will work fewer hours.
The Government have strengthened the welfare system to support those whose hours change including an increase to the UC standard allowance and the working tax credit basic element.
This builds on the initial package announced at Budget including enhancements to contributory employment support allowance, which will now be available from day 1and making advances for all new UC claimants available online with no requirement to attend a job centre.
Why isn’t this supporting part-time working?
The scheme is designed to help those who otherwise would have been made unemployed.
Can directors/sole directors of a company furlough themselves?
If a director is paid through a PAYE scheme, they will be covered. This is because the scheme is providing support for those needing to furlough when the business is unable to provide services to their customers during the outbreak. But if they take a small salary and the rest through dividends, then any remuneration from dividends wouldn’t be covered. This is primarily designed for employees who would otherwise be made redundant.
Can my employer top this up?
Yes. In order to qualify for the scheme, employers must pay their staff at least 80% of wages, up to the cap of £2,500 per month. It is up to them if they wish to top up the additional 20 per cent.
Does furloughing just cover basic pay – what about bonuses/commissions?
The grant covers wages, worth 80% of regular salary up to £2.500 per month. Bonuses and commissions aren’t covered.
What about employees that have already been made redundant?
The scheme will be back dated to March 1 with a view to covering those who have already been made redundant due to the Coronavirus outbreak.
If firms made employees redundant, or they stopped working for them on or after 28 February, firms can re-employ them, put them on furlough and claim for their wages through the scheme.
Can my employer sack me while I’m on furlough? Is my employer allowed to sack me as soon as the furlough scheme comes to an end?
Yes, you can still be made redundant while on furlough or immediately after. There is no requirement to bring the employee back to work after the period of furlough. If an employee is made redundant during the period of furlough then grant payments will cease.
However, in both cases normal redundancy rules and protections will apply. Where a business feels that redundancy is the only option, this must still follow the rules which include giving a notice period and consulting staff before a final decision is reached. More information on redundancy and your rights can be found at: https://www.gov.uk/redundancy-your-rights .
Can I be furloughed for a short period of time, e.g. a week or a couple of days, and then re-employed?
A worker must be furloughed for a minimum of 3 weeks for their employer to be eligible to claim under this scheme. This is consistent with the public health guidance seeking to minimise the number of people outside of their homes on a regular basis. The scheme supports employers asking the maximum number of employees to remain at home during the coronavirus outbreak. A clear minimum period also aids a clear definition of who is and who is not furloughed.
Can I work/volunteer/do training whilst furloughed?
- If you are furloughed you cannot work for that same employer during this period.
- You can volunteer or train, provided that this does not involve the manufacture or creation of an item or part thereof than can yield revenue for the company, the provisions of services to the company, or the provision of any service that can yield revenue for the company. Firms can require workers to undertake training from home, provided it meets the above.
- Furloughed employees can volunteer for the NHS/foodbanks during the coronavirus outbreak.
What is available to someone who has been told by the Government they are vulnerable and need to shield for 12 weeks?
- Employers are encouraged to do the right thing.
- Employers can furlough employees who are subject to social shielding, though the employee may need to agree to it first, depending on the nature of their contract. Employers are also unrestricted in their ability to hire new staff, including on a temporary basis to provide cover for furloughed workers that are subjected to social shielding.
- Furlough is what employers do to keep someone on payroll if they would otherwise be laid off; Statutory Sick Pay (SSP) is for someone who they plan to keep on payroll but is sick. Furlough is obviously more generous, and there is ultimately no way to stop firms from putting staff on furlough when they should actually be on SSP.
- Some of the 1.5m people shielding will already receive support through the welfare system (e.g. disability benefits, UC (if of working age), pension credit).