Following our recent article on the Job Retention Scheme (27th March), the Government has now provided more information on the furlough process for employers, including who can be claimed for and how to claim.
This article should be read in conjunction with our previous article on the Job Retention Scheme which can be found here.
The main updating points are:
The online claim service is expected to be up and running by the end of April 2020
To claim you must have:
There is confirmation that apprentices can be furloughed but you must pay the apprentice at least the Apprentice Minimum Wage, National Living Wage or National Minimum Wage for the time that they spend training. So, if there is any shortfall between the 80% wage and this amount, you will have to make up the difference.
Where a business continues to receive public funding for staff costs, employers are expected to continue to use that money to pay staff and not to furlough them.
Furloughed employees must not carry out any work. Employees who are working reduced hours or for reduced pay are not eligible.
Sick or self-isolating employees are entitled to sick pay, you cannot claim a furlough payment for them
A furloughed employee can do volunteer work which does not provide services to or generate income on behalf of the employer claiming the furlough payment. They can also take part in training courses. Indeed, the government is encouraging furloughed employees to undertake training.
If you provide contractual entitlements to employees on maternity, adoption, paternity or shared parental leave over the statutory entitlement, you can claim for this enhancement under the scheme.
You must confirm to the employee in writing that they have been furloughed and keep this record for five years.
If the employee has been employed for less than 12 months, you can claim for 80% of the average monthly salary since they started work.
You will need to pay employer National Insurance and pension contributions but these can also be claimed (subject to the 3% limit on the pension claim).
You can claim for regular payments that you are obliged to pay the employees, including compulsory commission payments. Discretionary bonus/commission payments cannot be claimed.
You cannot claim for non-monetary benefits and benefits provided through salary sacrifice schemes. HMRC have confirmed that Covid-19 is a life event which could warrant a change to a salary sacrifice scheme
You will have to continue to pay the Apprenticeship Levy and Student Loans.
You will need to calculate the amount you are claiming. HMRC retain the right to retrospectively audit all aspects of your claim.
Employees can be furloughed for a minimum period of 3 weeks and can be furloughed multiple times. Once the claim is submitted, HMRC will check this and pay it to you via BACS.
The full details of the Government’s Coronavirus Job Retention Scheme for employers can be found here.
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The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.