- 23rd March 2020
- Posted by: Suzy Hill
- Category: Personal Tax, COVID-19 NEWS, Business News
Covid-19 – Support for businesses through the Coronavirus Job Retention Scheme
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.
It remains unclear whether Directors or those on zero hour contracts will be applicable under this scheme. We also expect an anti avoidance clause for employers that have no intention of re employing people.
For those that qualify the Chancellor announced that it would be back dated to 1st March 2020.
How to access the scheme
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)
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month, which we understand may be subject to tax and national insurance.
HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers. This requires a whole new IT system implemented by HMRC, we do not expect this until April 2020.