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.
One of Government’s latest attempts at tackling COVID-19 saw the promise of paying 80% of an employee’s wages up to £2,500.
In order to access this scheme, as the employer, you will need to:
- Determine which of your employees have ‘lay-off’ terms in their contracts and those who are unable to continue working and will be laid off as a consequence
- Change the status of these workers to ‘furloughed workers,’ and notify your employees of this change. (The current employment law requirements still apply so it is imperative that you agree/negotiate any changes with the employees before officially implementing them)
- Submit the relevant 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. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
The Chancellor, Riski Sunak, announced “the scheme, open to any employer in the country, will cover the cost of wages backdated to 1 March and will be open before the end of April for at least three months. There’s no limit on the funding available for the scheme, we will pay to support as many jobs as needed.”
Government have deferred Valued Added Tax (VAT) payments for 3 months. This is an automatic decision and will not require businesses to apply.
- The deferral will apply from 20 March 2020 until 30 June 2020.
- If you’re self-employed, Income Tax payments due in July 2020 under the Self-Assessment system will be deferred to January 2021.
- All UK businesses will be eligible.
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021. This will apply to all self-employed individuals.
Government are working exceptionally hard to put new laws through as quickly as possible. We are expecting further guidance to be published in due course.
View the full guidance here.