The Government Coronavirus Job Retention Scheme opened for claims this morning with capacity of up to 450,000 claims per hour. At times when the site is busy there may be an online virtual queue.
If you claim, the entirety of the grant received to cover an employee’s subsidised furlough pay must be paid to them in the form of money. There is also an expectation that by using the scheme the employee will be returning to work for you as soon as your business is able to reopen.
Companies submitting claims by Wednesday should expect the money to be in their bank accounts by the 30th of April for the entire period from March to June.
Government Coronavirus Job Retention Scheme Qualification
You can only claim for furloughed employees that were on your PAYE payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020.This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.
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 the employer after that and prior to 19 March 2020, can also qualify for the scheme if the employer re-employs them and puts them on furlough.
This does leave obvious holes in the scheme with anyone switching jobs or who started a new job but their employer hadn’t submitted in RTI by the 19th of March being excluded from the scheme. Whilst this is heartbreaking and financially devastating for those who fell through the gaps, the Chancellor has been clear that he can’t cover everyone, cant’ rescue every business and can’t save every charity. The Government consider there is too much risk of fraud from those how might add their mates to their payroll to get them free money.
This also means that those who originally thought they qualified as they started new jobs on or after the 1st of March have now also discovered they’ve suddenly been excluded from the scheme if their employer hadn’t submitted an RTI by the 19th.
What can you claim under the Government Coronavirus Job Retention Scheme?
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’ll 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 to 100% nor for any pension contributions you make that are above the mandatory employer contribution.
You can choose to top up your employees’ wages, but you do not have to. Employees must not work or provide any services for the business while furloughed, even if they receive a top-up wage.
What to include when calculating wages under the Government Coronavirus Job Retention Scheme
The amount you should use when calculating 80% of your employees’ wages is regular payments you are obliged to make, including:
- regular wages you pay to employees
- non-discretionary overtime
- non-discretionary fees
- non-discretionary commission payments
- piece rate payments
You cannot include the following when calculating wages:
- payments made at the discretion of the employer or a client – where the employer or client was under no contractual obligation to pay, including:
- tips
- discretionary bonuses
- discretionary commission payments
- non-cash payments
- non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay
No part of the grant should be netted off to pay for the provision of benefits or a salary sacrifice scheme.
When you are ready to claim go to the claim site here.
