The Coronavirus Job Retention Scheme has been set up to allow UK employers to access support to help with paying employees’ salaries that would been laid off during Covid-19.
This scheme has been extended until the 31 October 2020, it will continue in its current form until the end of July and changes to allow more flexibility will come in from the start of August. We know that from the start of August furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff – more specific details and information around its implementation will be made available by the end of May.
Click here for more information and to apply.
PLEASE READ INFORMATION BELOW ABOUT ELIGIBILITY AND THE INFORMATION YOU NEED TO HAVE TO HAND BEFORE APPLYING.
Before you make a claim you need to ensure that you and your furloughed employee are entitled to use the scheme and have worked out how much you can claim.
Employees you can claim for
You can claim for employees that were employed as of 19 March 2020 and were on your PAYE payroll on or before that date; this means that you will have made a Real Time Information (RTI) submission notifying HMRC of payment of that employee on or before 19 March 2020
You can also claim for 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 you after that, and prior to 19 March 2020, can also qualify for the scheme if you re-employ them and put them on furlough.
Employees can be on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed.
To be eligible for the grant, when on furlough, an employee cannot undertake work for, or on behalf, of the organisation. This includes providing services or generating revenue. Employers are free to consider allocating any critical business tasks to staff that are not furloughed. While on furlough, the employee’s wage will be subject to usual income tax and other deductions.
Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.
To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. A record of this communication must be kept for five years.
You do not need to place all your employees on furlough. However, those employees who you do place on furlough cannot undertake work for you.
Click here for more information on eligibility for the Coronavirus Job Retention Scheme.
Work out how much you can claim
You can claim for 80% of your employee’s wages (even for employee’s on National Minimum Wage) – up to a maximum of £2,500 per month.
You still need to pay employer National Insurance and pension contributions on behalf of your furloughed employees, and you can claim for these too.
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
Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they are written to confirming their furloughed status.
HMRC have a calculator that you can use to work out what you can claim.
Only submit one claim per pay period – you can’t submit another claim for overlapping periods; this means that in each claim you should include all furloughed employees paid during that period.
This is the information you will need to use it:
- start date of your claim
- end date of your claim (for example, date of next payroll run)
- employee’s pay dates (when they get their pay)
- end dates of the periods of time (for example monthly) that they are paid for
- how much they are paid (before deductions)
- when their furlough started (and ended, if not ongoing)
- their National Insurance category letter
To make a claim you will also need:
- to be registered for PAYE online
- your UK bank account number and sort code
- your employer PAYE scheme reference number
- the number of employees being furloughed
- each employee’s National Insurance number
- each employee’s payroll or employee number (optional)
- the start date and end date of the claim
- the full amount you’re 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
There is now an option to save your progress whilst making a claim, this means that you can return to a partially completed claim, rather than having to do it all in one go.
After you’ve made a claim
Once you’ve claimed, you’ll get a claim reference number. Keep a note or a print-out of your claim reference number – you won’t receive a confirmation SMS or email. HMRC will then check that your claim is correct and pay the claim amount by BACS into your bank account within 6 working days.
You must also:
keep a copy of all records, including:
- the amount claimed and claim period for each employee
- the claim reference number for your records
- your calculations in case HMRC need more information about your claim
Depending on whether you are using the grant to pay wages or to reimburse wages that you’ve already paid, you may need to report payments on the PAYE Real Time Information system.
You also need to tell your employees that you have made a claim and that they do not need to take any more action and pay your employee their wages, if you have not already.
Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles. Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.