The Coronavirus Job Retention Scheme is now open for application. Employers can now claim online for a grant for 80% of their furloughed employees’ salaries, up to a maximum of £2,500 per employee. Click here to make a claim.
HMRC have produced this step by step guidance on how to make a claim. There is also a calculator to help you work out your claim. The system can process up to 450,000 applications per hour and employers should receive the money within 6 working days of making an application. To receive payment by 30 April, you will need to complete an application by 22 April. Please keep a note or print-out of your claim reference number as you won’t receive a confirmation SMS or email.
The Chancellor has also announced one month extension to the scheme. This means that the scheme will now be open until the end of June, to reflect continuing lockdown measures.
HMRC are holding live webinars providing an overview of the scheme to help employers and employees deal with the economic impacts of coronavirus. Register for a live webinar here.
KAREN KIRBY FROM GREENSHOOT HR HAS THE FOLLOWING TIPS ON FURLOUGHING
Being put on furlough, reducing pay to 80%, and furlough being extended MUST be agreed by the employee (worker etc.). Therefore, you should have a letter and acceptance on file for everyone on furlough stating:
- Why they are on furlough
- How and why they have been selected (especially if others aren’t on furlough)
- Length of furlough – if you put a date in your original letter, you will need to send another, if you put until “further notice”, you should send another letter to make clear dates and that it is extended until 30.06.20.
- If you end furlough, that you will try to give a week’s notice and send a letter to say furlough ending.
- Expectations – can’t work for the business.
- A point of contact for questions and queries.
Consent cannot be by default – so get your letters and consents in order and on file. If you have not done so, in the need to make a swift decision, get it sorted now; including letters about any extension. I can help with that if you need me to.
On & off furlough – we know the minimum period of furlough is 3 calendar weeks, but there is no guidnace on how long they can be brought back to work for before being furloughed again. From a solicitor’s webinar I attended last week (Geldards – other law firms are available), her view was someone could be brought back for a short time and then re-furloughed, e.g. payroll clerk coming in for a couple of days to process payroll, as long as the individual furlough periods are a minimum of 3 weeks. Again, this would need letters and consent (as above), and the 80% grant is based on the pre-19th March pay.
Calculating the amount of the grant – this link gives clear instruction as to what is covered and what is not.
It is based on the pay paid at last pay date before 19th March 2020. So where someone has had a pay rise in March, paid after the 19th March, or in April (NMW/NLW), this isn’t included in the calculation. If you choose to pay this higher rate, that is your choice and will be at your cost. The grant for the 80% is a separate mechanism to normal payroll. You process payroll in the normal way and calculate the 80% for the grant separately.
Included in the calculation are any payments you are obliged to pay by contract – car allowance, regular wages, non-discretionary overtime, fees and commissions.
Holiday – from Geldards’ webinar – the jury seems to be out on this. Some are saying holiday can be taken during furlough whilst others are saying not. However, HMRC and ACAS are suggesting it can. I would wait until the Government announcement, which is likely to be soon, given the furlough extension.
My view has been that holiday is contractual, and statutory, and part of what you would normally pay over a year, and therefore you should not claim 80% of that cost. However, I may be wrong. If it turns out employees can take holiday during furlough, you will need to bear the following in mind:
- You will need to pay them for holiday in the normal way. From 01.04.20, this is needs to be the average of the last 52 weeks earnings (excluding periods of SSP, SMP etc. and furlough) to give them their normal pay when on holiday (nor their basic).
- This will likely be more than 80% of the pre-19th March pay, which is what you use to calculate your claim as a grant via the CJRS.
- The additional cost of the difference is yours.
As I said – this is still not clarified – so keep a look out and bear this in mind.
I’m still available to take calls or answer e-mails, if you’d like to discuss the situation peculiar to your business. The mechanics of the scheme are still out of my area of expertise – your accountant, bookkeeper or payroll having a better understanding – but I will keep listening, looking, researching and passing on information from other sources.
Karen can be reached on firstname.lastname@example.org