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HMRC publishes details of furloughed employees’ scheme

Published: 

Mon 30 March, 2020

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HM Revenue and Customs (HMRC) has published guidance on the Coronavirus Job Retention Scheme (CJRS), this is where employers will be able to claim back 80% of the wages (up to a max £2,500 per month) of employees who have been furloughed, this is in response to the COVID-19 pandemic.

The full guidance here, published on 26 March 2020, provides some detail on which businesses and employees will be covered, what counts as 'furloughing' for this purpose and how employees' wages will be calculated. HMRC expects the scheme to be up and running by the end of April.

This is something that as an employer you will need to read and below as just a few points as a summary:

  • The scheme is open to all UK employers that had a PAYE scheme in place on 28 February 2020

  • Any organisation with employees may apply; however, the government does not expect public sector employers to use it if central government continues funding wage costs in the normal way.  With agency employees, the scheme is only available for agency employees who are not working.

  • Employers can reclaim up to 80% of wage costs up to a max of £2,500 per month, plus (not including) the associated employer NICs and minimum auto enrolment pension contributions on that wage.  Fees, commissions and bonuses are not included.

  • An employer can choose to top up the wages, but does not have to (subject to employment law and any contractual entitlements)

  • To be eligible, the employee must have been on the payroll on 28 February 2020.  If they were hired later, they are not eligible.  Anybody who was on the payroll on 28 Feb and has since been made redundant can be rehired and put on the scheme

  • Furlough leave must be taken in minimum blocks of three weeks to be eligible for funding

  • There is nothing in the guidance which prohibits rotating furlough leave amongst employees, provided each employee is off for a period of at least three weeks

  • The employee must not be working at all.  If they work for even an hour, they are not eligible.  However, they can undertake training and do volunteer work, provided they do not provide services to or make any money for their employer.

  • Employees on sick pay or self-isolating cannot be furloughed but can be furloughed afterwards.  Employees who are shielding can be placed on furlough.

  • Employers can only claim once every three weeks, ie they cannot get weekly reimbursement.  Claims can be backdated to 1 March 2020.

 

We are in difficult and extraordinary time at the moment and if anyone need a furloughed sample letter or some advice please do not hesitate to contact the office: office@castleassociates.org.uk or give us a call 0115 9696016

 

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