Businesses affected by Coronavirus can still access the Recovery Loan Scheme (RLS) launched in April,…
With substantial restrictions for everyone on the circumstances in which we cant leave our homes, and many businesses being forced to close, the Chancellor has announced a scheme to reimburse up to 80 per cent of the cost of the wages of ‘furloughed workers’.
What is a ‘furloughed worker’?
Anyone designated as a ‘furloughed worker’ will remain on your payroll, rather than being laid off. However, they will not carry out work for your business or organisation.
They will generally be people who would otherwise be at risk of being laid off or being made redundant.
How do I designate an employee as a ‘furloughed worker’?
You will need to notify the relevant employee that you are changing their employment status to ‘furloughed worker’.
Designating someone as a ‘furloughed worker’ remains subject to the provisions of existing employment law and their contract of employment and so in some circumstances, it may be necessary to negotiate a furlough with the employee concerned.
What do I get if I designate an employee as a ‘furloughed worker’?
HM Revenue & Customs will provide you with a sum equivalent to 80 per cent of each furloughed workers’ total wage costs, up to a limit of £2,500 a month, for three months initially, backdated to 1 March 2020. This includes National Insurance Contributions and Pension Contributions.
Can I pay the ‘furloughed worker’ more than 80 per cent of their usual salary?
Yes – you are free to do so if you wish but you are not required to do so.
How do I apply to the scheme?
HMRC is setting up a new online portal through which you will be able to make applications. The Government has said that it will be ready in time for the first payments under the scheme to reach businesses before the end of April.
What information do I need to provide?
Full details of the information that you will need to provide in order to access funds under the scheme have not yet been announced. However, we anticipate that you will need to provide the below:
- The employee’s name
- National Insurance Number
- The amount they have been paid in at least each of the last three months of normal employment
- Contract details, such as whether their employment is permanent or temporary and whether they work part-time or full time
- The date they were designated as a ‘furloughed worker’
- The date that they will cease to be designated as a ‘furloughed work’, if this is known.
If you have or if you intend to furlough any of your staff, we would be grateful if you could provide this information to us as soon as possible so that we can help you access the scheme without delay.
For detailed advice, please contact us.