Coronavirus Job Retention Scheme goes live as it is extended to end of June

21 Apr 2020

The UK Government's Coronavirus Job Retention Scheme went live on 20th April after Chancellor Rishi Sunak extended it until the end of June.

The scheme allows UK businesses that have been severely disrupted by COVID-19 to furlough their employees rather than laying them off, with the government paying 80% of their wages up to a maximum of £2,500. The Job Retention Scheme is one of the measures the Government has been taking to ensure the wellbeing of people and businesses within the UK is preserved during these unprecedented times.

HMRC has emailed two million employers providing a link to a five-step guide to claiming the Scheme and has warned business owners to be aware of the scams that are circulating.

The Coronavirus Job Retention Scheme was initially open for three months and was backdated from 1st March 2020 to the end of May. However, the Chancellor had already stated that the scheme would be kept under review and extended if necessary, which happened yesterday.

Chancellor Sunak Rishi said: 'We have taken unprecedented action to support jobs and businesses through this period of uncertainty, including the UK-wide Job Retention Scheme. With the extension of the coronavirus lockdown measures . . . it is the right decision to extend the furlough scheme for a month to the end of June to provide clarity.

'It is vital for people's livelihoods that the UK economy gets up and running again when it is safe to do so.'

The Treasury stated that further decisions on the Job Retention Scheme will take into account developments on the wider measures to reduce the spread of the coronavirus.

What does it mean to be furloughed?

If you are employed by a business and you are furloughed by your employer, it means that you are kept on the company's payroll while the business might experience less work than in usual circumstances.

Being on furlough does not allow you to undertake any work from either your employer or any other business.

Who can access the Job Retention Scheme?

The Scheme is open for any UK business. In order to access the Scheme, employees need to have been registered to a payroll scheme before 19th March. Unfortunately, it is currently not possible to access the Scheme if you have started working at your present job after 19th March.

Employers can claim for all employees who have been set up on a PAYE payroll before 19th March and which were notified to HMRC on an RTI submission on or before this date.

Company directors are also eligible for the Scheme and can receive support. Furloughed directors need to still carry out duties to fulfil statutory obligations they owe to their company; however, they should not do any work that would be carried out under normal circumstances to generate commercial revenue or that provides services to or on behalf of their company.

Can employees with more than one job be put on the Scheme?

Yes. If your employee has more than one job, each job will be treated separately and the cap will apply to each employer individually. Employees can be furloughed in one job and continue to work for another employer while receiving normal wages.

What steps should employers take when applying to the Scheme?

There are a few steps you need to take when putting your employees through the Coronavirus Job Retention Scheme:

  1. Change the state of the chosen employees to 'furloughed workers';
  2. Contact HMRC and submit information regarding the furloughed employees. This includes: the number of employees you want to furlough, their National Insurance numbers, their payroll or employee numbers;
  3. Provide HMRC with the start and end dates of the claim and the full amount you wish to claim – for more details on the information you should submit to HMRC, please visit https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme

How long will the Scheme last?

Currently, the Job Retention Scheme has been extended until the end of June. However, this deadline is under constant revision by the Government in an effort to ensure the safety of all employers and workers.

As your Accounting firm, AVASK can help you throughout the entire procedure to apply to the Scheme. AVASK can arrange to put your employees on furlough leave, produce agreements for the employer and employees to sign and draft any agreements in accordance to the employment contract.

If you have no PAYE setup, we can enrol your business for payroll services.

We can also make the application for the Coronavirus Job Retention Scheme Grant on your behalf, creating a smooth and hassle-free service.

To find out more about the Coronavirus Job Retention Scheme and how AVASK Accounting can help you during these unprecedented times, contact our Payroll Manager at [email protected] or on +44 2380 600 120 for support.

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