Coronavirus Job Retention Scheme online portal now open
The information and any opinions contained in this summary are for general information purposes only, are not intended to constitute legal or other professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular circumstances.
The Coronavirus pandemic has affected the retail sector in a variety of ways from essential businesses remaining open to food businesses adapting to provide a takeaway offering and following the Government’s advice, non-essential businesses have had to temporarily close their doors. As a result, many businesses, including retail, cannot maintain their current workforce as operations have been affected by the pandemic. In response to this situation the Government has launched the Coronavirus Job Retention Scheme which will allow companies to keep employees on payroll.
What is the Coronavirus Job Retention Scheme and who is eligible?
Type of business: All UK employers with a PAYE scheme, if employees have to be laid off and meet the eligibility rules; also applies to the public sector, Local Authorities and charities.
What it is: If you cannot maintain your current workforce because your operations have been severely affected by Coronavirus, you can furlough employees and apply for a grant that covers 80% of employees’ wages, up to £2,500 per month. This scheme is to safeguard workers from being made redundant and is a temporary scheme in place for 4 months starting from 1 March 2020 but may be extended if necessary.
HMRC will reimburse 80% of employees’ wages, up to £2,500 per month. The scheme is to safeguard workers from being made redundant by covering the cost of wages backdated to 1st March 2020 and is initially open for 3 months.
What to do: Designate affected employees as ‘furloughed workers’ and notify your employees of this change. A ‘furloughed worker’ is an employee who has been asked to stop working but is being kept on the payroll.
Agreeing to furlough employees
- As an employer, you should discuss with their staff and make any changes to the employment contract by agreement. When making decisions in relation to the process, including who to offer furlough to, equality and discrimination laws still apply.
- To be eligible for the grant, you must confirm in writing to their employee confirming that they have been furloughed. There needs to be a written record, but a written response from the employee is not required. A record of this communication should be kept for five years.
Minimum furlough periods
- The minimum period for any employee to be placed on furlough is 3 consecutive weeks
- Employees can be furloughed multiple times, but each instance must be for the minimum period
- When an employee returns to work, they must be taken off furlough
Before you start your claim, you will need to:
To claim, for the Coronavirus Job Retention Scheme, you must have:
- Created and started a PAYE payroll scheme on or before 19 March 2020
- Enrolled for PAYE online
- A UK bank account
If you use an agent who is authorised to act for you for PAYE purposes, they will be able to make a claim on your behalf and you will need to tell them which bank account you would like the grant to be paid into.
Claims should be started from the date that the employee finishes work and starts furlough. You may choose to top up your employees’ wages, but you do not have to.
You cannot claim for:
- additional National Insurance or pension contributions you make because you choose to top up your employee’s wages
- any pension contributions you make that are above the mandatory employer contribution
The Government has provided an online calculator that can help you work out 80% of your employees’ wages, National Insurance Contributions, and pension contributions.
Employees you can claim for:
- You can only claim for furloughed employees that were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020.
- An employee can be on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts.
To be eligible for the grant, when on furlough an employee cannot undertake work for, or on behalf, of the organisation or any linked or associated organisation. While on furlough, the employee’s wage will be subject to usual income tax and other deductions.
When: The Job Retention Scheme has now been launched and you can now claim. Click here for more information. You will need the Government Gateway user ID and password you received when you registered for PAYE online.
HMRC have provided a step by step guide which explains the information that employers need to provide to make a claim through the Coronavirus Job Retention Scheme. HMRC also has a webinar online on how to make a claim, click here to watch.
HMRC will check claims made through the scheme and payments may be withheld or need to be repaid in full to HMRC if the claim is based on dishonest or inaccurate information or found to be fraudulent.
For more information about the Job Retention Scheme, click here.
What can The Retail Mutual do for your business?
We fully appreciate that these are uncertain times for many businesses. As you can appreciate, we have received many enquiries about the Coronavirus, and we are doing our best to respond to everyone in a timely matter. To help answer some of the recurring questions, we have created a Coronavirus resource hub which contains FAQs, lots of useful government links and information as well as other useful content that can assist you through this time.