The Coronavirus Job Retention Scheme


Well, we don’t know about you but for us here at Network Scientific the last three weeks have been a blur! While we are now settled into working from home, we are doing our best to ‘carry on as normal’ and help to support and advise our clients any way we can.

There seems to be a lot of confusion out there regarding the Government’s Coronavirus Job Retention Scheme, so here are some common FAQs we’ve come across over the past week or so:

What is the Coronavirus Job Retention Scheme?

The scheme has been implemented by the UK Government in an attempt to reduce the number of individuals being laid off or made redundant due to the current COVID-19 situation.

Why has it Been Introduced?

The aim is to ultimately reduce the number of individuals becoming unemployed due to the coronavirus pandemic.  Rather than losing their employment status due to businesses having to temporarily close, businesses experiencing a significant downturn in custom, etc., employees will take on the temporary status of ‘Furloughed’.

What Does it Mean to Furlough Employees?

‘Furlough’ is typically an American term and is new to us here in the UK. Basically, it means that you are temporarily releasing them from their responsibilities within their role, while keeping them on your payroll. The point is, to re-introduce them back into the workplace when the business situation improves.

Who Can be Furloughed?

The scheme is available to all employers, including those that employ part-time workers, temporary workers on an agency contract and those on flexible or zero-hours contracts. As long as they’ve been on the PAYE payroll since 28 February 2020 they qualify for the scheme. In addition, employees who have been made redundant since that date due to COVID-19 could be covered too if they are rehired by their employer.

Why should I Furlough my Employees?

The UK Government are currently offering grants that employers can access to cover up to 80% or up to £2500 of their employee’s monthly salaries plus the associated Employer National Insurance (NI) contributions and minimum automatic enrolment employer pension contributions.

Do I Have to Pay the Other 20%?

You have the option to top-up the salary, however, you would not be able to claim back any NI payments due for the top-up.

Can my Employees Still Work While Being Furloughed?

No, they can neither work for your organisation or be paid to work for another while they are furloughed.

Do I still have to pay Tax?

The wages of furloughed employees will still be subject to the usual tax and NI deductions. In addition, the employer will still be required to pay employers NI and any pension payments.

Is There a Limit to how Many Staff I can Furlough and for How Long?

There is no limit to how many staff can be furloughed within any given organisation but the scheme is temporary for the moment and will last for at least three months starting from 1 March 2020.

How do I Claim?

Unfortunately, the online service you will need to use to claim is not up-and-running yet. It is expected to be available by the end of April 2020.

Where can I Find Further Information?

Please visit: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

 

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