Summary of Coronavirus Job Retention Scheme

Coronavirus Job Retention Scheme

All UK employers with a PAYE scheme 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. • If you cannot maintain your current workforce because your operations have been severely affected by coronavirus (COVID-19), you can furlough employees and apply for a grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution of 3% on qualifying earnings) on that subsidised furlough pay.

• This is a temporary scheme that was initially put in place for 4 months starting from 1 March 2020 and will continue in its current format until the end of July. Employers can use the scheme anytime during this period.

• From August, employers currently using the scheme will have more flexibility to bring their furloughed employees back to work part time whilst still receiving support from the scheme.

• This will run for three months from August through to the end of October. Employers will be asked to pay a percentage towards the salaries of their furloughed staff. The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month. More specific details and information around its implementation will be made available by the end of May.

You must have:

• Created and started a PAYE payroll scheme on or before 19 March 2020
• enrolled for PAYE online
• a UK bank account

• Furloughed employees must have been on your PAYE payroll on or before 19 March 2020 and were notified to HMRC on an RTI submission on or before 19 March 2020

• Employees that were employed as of 28 February 2020 and on payroll (i.e. notified to HMRC on an RTI submission on or before 28 February) and were made redundant or stopped working for the employer after that and prior to 19 March 2020, can also qualify for the scheme if the employer re-employs them and puts them on furlough.

• Employees can be on any type of employment contract, including full time, part-time, agency flexible and zero-hour contracts.

• Foreign nationals are eligible to be furloughed. Grants under the scheme are not counted as ‘access to public funds’, and you can furlough employees on all categories of visa.

• Find out more about which employees you can put on furlough and claim for via the UK Government website.

Agreeing to Furlough Employees:

• Employers must confirm in writing to their employee confirming that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming through the scheme. Collective agreement reached between an employer and trade union is also acceptable for the purpose of such a claim. There needs to be a written record, but the employee does not have to provide a written response. A record of this communication must be kept for five years.
• Any employees you place on furlough must be furloughed for a minimum period of 3 consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of 3 consecutive weeks. Each period of furlough can be extended by any amount of time whilst the employee is on furlough. However the scheme end date is the last day you can claim for through this scheme.

When your employees on furlough. You cannot ask your employee to do any work that:
• Makes money for your organisation or any organisation linked or associated with your organisation.
• Provides services to your organisation or any organisation linked or associated with your organisation.

Your employee can:
• Take part in training
• Volunteer for another organisation or employer

• Your employee will still pay the normal taxes they pay out of their wages. This includes pension contributions (both employer contributions and automatic contributions from the employee), unless the employee has opted out or stopped saving into their pension.

• If contractually allowed, your employees are permitted to work for another employer whilst you have placed them on furlough.

Detailed guidance for employers can be accessed on the UK Government’s website. This details the agreeing to furlough workers, working out what you can claim and next steps once claims have been submitted. Note: this guidance is regularly updated.

Detailed guidance for employees can also be accessed on the UK Government website.

You can also find out more information about this scheme via HMRC’s YouTube Channel

• UK Government guidance documents around the Coronavirus Job Retention Scheme are regularly updated with additional information. It is advisable to follow any hyperlinks within this summary for the latest available versions or find these directly via the GOV.UK website.
• If you’ve already worked out how much you can claim, you can claim for wages online via the HMRC online portal which is available on the UK Government website.
• HMRC will then check that your claim is correct and pay the claim amount by BACs into your bank account within 6 working days.
• Please do not contact HMRC unless it has been more than 10 working days since you made the claim and you have not received it in that time.

Before you Claim:

• You will need to work out how much you can claim through the scheme. HMRC will retain the right to retrospectively audit all aspects of your claim.
• Employers should discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment.

To make a claim you will need:

• To be registered for PAYE online
• Your UK bank account number and sort code (only provide bank account details where a BACS payment can be accepted)
• The billing address on your bank account (address on your bank statements)
• Your employer PAYE scheme reference number
• The number of employees being furloughed
• Each employee’s National Insurance Number (you will need to search for their number if you do not have it or contact HMRC if your employee does not have a number)
• Each employee’s payroll or employee number (optional)
• The start date and end date of the claim
• The full amount you are claiming for including employer National Insurance contributions and employer minimum pension contributions
• Your phone number
• Contact name

You also need to provide either:

• Your name (or the employer’s name if you’re an agent)
• Your Corporation Tax unique taxpayer reference
• Your Self-Assessment unique taxpayer reference
• Your company registration number

After you’ve claimed:

You must:
• Keep a copy of all records for 6 years, including:
o the amount claimed and claim period for each employee
o the claim reference number for your records
o your calculations in case HMRC need more information about your claim
• Tell your employees that you have made a claim and that they do not need to take any more action
• Pay your employee their wages, if you have not already

• You must pay the full amount you are claiming to your employee, even if your company is in administration. If you’re not able to do that, you’ll need to repay the money back to HMRC.

Guidance on how and when to report grant payments using the PAYE Real Time Information System is now available via the UK Government website.