COVID-19: The UK's New Job Retention Scheme
What we know so far ...
POSTED BY ROGER EDDOWES ON 26/03/2020 @ 8:00AM
Recently, the most common questions I've been getting from my clients have been about the UK's new Job Retention Scheme. Although we have some headlines, the detail has still to come out ...
Many questions remain about the UK's new Job Retention Scheme!
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So, what do we know already then? Well, HMRC will set up a new online portal so that all UK employers, regardless of size, will be eligible for assistance where an employee has been designated by you as a 'furloughed worker'.
"HMRC will reimburse 80% of furloughed workers wage
costs, up to a cap of £2,500 per month!"
The current plan is that this will be in place for 3 months, at which point it will be reviewed and it will be backdated to 1 March 2020. Employers must set out which of their employees are 'furloughed workers' and make sure they are aware they have been furloughed. I suggest you get their agreement and document it now, while we wait for more procedural details.
Furlough is the equivalent of lay-off. So, you can lay-off staff, continue to pay them and recover 80% of that cost up to £30k per annum. The current guidance states, "You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to". Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
"What we don't know is when the HMRC portal will be working!"
We are also unclear about how quickly the amounts will be refunded. As it's a reimbursement, for now, I'm assuming employers have to continue to make the wage payments when due. Other questions that need answering around pension contributions and employers NI still haven't been answered. And does it apply to directors too?
So, there's still a lot to find out about the Job Retention Scheme, but you can be sure I'll let you know via another blog post, by email and on social media as soon as I hear more.
Until next time ...
Would you like to know more?
If you have questions about the Job Retention Scheme, call me on 01908 774320, leave a comment below or click here to ping over an email and let's see how I can help you.
About Roger Eddowes ...
Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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