Coronavirus Job Retention Scheme
21st of March, 2020Some further clarification has come through from ICAEW concerning the 80% wages payments. Not quite so generous as it first appeared as it will not be paid for working employees, but only for those employees who are “furloughed” ie laid off with no work to do. For those employees, rather than being made redundant, they can still be paid and the government will reimburse up to 80% of the salary, subject to details being provided to HMRC via a new HMRC portal. If your business activity has reduced or you have to close temporarily due to some Coronavirus based cause - for example being instructed to close by the Government or possibly due to an outbreak of the virus amongst workers and you no longer need all your staff, this is an option. It will cost you 20% of the employee’s salary, but the employee will be available should business pick back up. You will however need to notify the employee that they have been furloughed. Existing employment law applies. Details of salary paid to furloughed employees will need to be put through to HMRC via a new portal and currently, It is unclear how long it will then take HMRC to reimburse the 80% wages paid. It is also currently unclear what will be the precise criteria for deciding that an employee can be furloughed. For example would voluntary business closure as a precaution qualify? No doubt further clarification will be forthcoming in days to come.
