Coronavirus Job Retention Furlough Scheme has now been clarified by HMRC.
HMRC Update as of 15th April 2020 Announcements
The Coronavirus Job Retention Furlough was issued by the Government on Friday 27th March to set out, how they will support Employers and Employees through the Covid-19 pandemic.
Since the announcements, more information has become available and some of the requirements and eligibilities have changed.
At NORI HR & Employment Law, we have been studying the information, and continue to keep this page updated.
We appreciate there is more clarification required for more complex situations. Each and every business will have their own special circumstances and we are happy to talk you through these.
So, if you would like support, we have opened our HR support line up to ANY business, whether you are an existing client or not, for free.
You can contact is on 01254 947829
The Key Points of Coronavirus Job Retention Furlough Scheme
Employers can claim for 80% of furloughed employees’ usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.
Employers can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.
Employers can use this scheme anytime during this period.
Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them.
Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff.
Furloughed employees must have been on your PAYE payroll on or before 19th March 2020, and can be on any type of contract, including:
- Full-time employees
- Part-time employees
- Employees on agency contracts
- Employees on flexible or zero-hour contracts
You can only claim for furloughed employees that were on your PAYE payroll on or before 19th March 2020 and which were notified to HMRC on an RTI submission on or before 19th March 2020.
This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19th March 2020.
Employees hired after 19th March 2020 cannot be furloughed or claimed for in accordance with this scheme.
The scheme covers employees who were made redundant or left for any reason on or after 19th March 2020, if they are rehired by their employer.
To be eligible for the subsidy, when on furlough, an employee can not undertake work for or on behalf of the organisation.
If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme.
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.
You can claim for furloughed employees who are shielding in line with public health guidance (or need to stay home with someone who is shielding) if they are unable to work from home and you would otherwise have to make them redundant.
Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. For example, employees that need to look after children can be furloughed.
A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation.
If contractually allowed, your employees are permitted to work for another employer whilst you have placed them on furlough.
If the employee’s pay varies and has been employed for a full twelve months prior to the claim, you can claim for the higher of either:
- The same month’s earning from the previous year
- Average monthly earnings from the 2019-20 tax year
How to claim. You will need:
- Your employer PAYE reference number
- The number of employees being furloughed
- National Insurance Numbers for the furloughed employees
- Names of the furloughed employees
- Payroll/employee number for the furloughed employees (optional)
- Your Self-Assessment Unique Taxpayer Reference or Corporation Tax Unique
- Taxpayer Reference or Company Registration Number
- The claim period (start and end date)
- Amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
- Your bank account number and sort code
- Your contact name
- Your phone number
You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.
You can only submit one claim at least every 3 weeks, which is the minimum length an employee can be furloughed for. Claims can be backdated until the 1st March 2020 if applicable.
We cannot advise on how in-depth the HMRC will audit your decision making when placing employees on furlough, and each furlough decision must be looked at carefully by businesses.
For information direct from the Government, click to visit https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme