Coronavirus Job Retention Scheme

by | Mar 27, 2020 | Coronavirus Covid-19, Coronavirus Job Retention Scheme, Uncategorized

symbol indicating job retention

The Coronavirus Job Retention Scheme was announced at a government press conference on Friday 20 March.

The new Coronavirus Job Retention Scheme (CJRS) has been set up to help pay people’s wages.  Any employer in the country (small or large, including charitable or non-profit) will be eligible for the scheme.

  • Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the coronavirus outbreak.
  • UK workers of any employer who is placed on the CJRS can keep their job, with the government paying up to 80% of a worker’s wage costs, up to a total of £2,500 per worker each month.
  • This will be backdated to 1st March and will be initially open for 3 months, to be extended if necessary.
  • It can apply to anyone who was on the payroll at 29 February 2020, even if they have subsequently been made redundant, as long as they are reinstated on the payroll.

How to access the scheme

According to the Government guidance, you will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

UPDATE 26 March 2020

The Government has issued guidance for employers on claiming wage costs through the Job Retention Scheme.

Guidance is given on:

  1. Who can claim
  2. Employees you can claim for
  3. Work out what you can claim
  4. What you’ll need to make a claim
  5. Claim

The team at Bates Weston are working from home, but very much ready and willing to help business owners understand and implement the Coronavirus Job Retention Scheme, if you have decided you need to make use of it. We can help you look at your options, so if you need us, please do get in touch. You can email or call on 01332 365855.

UPDATES 27 March 2020

The Government has produced new guidance on  the Coronavirus Job Retention Scheme, in which it confirms that the government will cover employer National Insurance and pension contributions of furloughed workers – on top of 80% salary and that those furloughed workers can volunteer for the NHS without risking their pay.

There has been much debate today over whether directors of owner-managed companies, including sole directors can be furloughed as employees on the PAYE element of their remuneration.  According to commentators, this has now been confirmed.

UPDATE  31 March 2020

The Institute of Chartered Accountants in England and Wales (ICAEW) confirms its understanding that Company directors that receive salaries through PAYE can be furloughed and apply for a grant of 80% of their salary during the Coronavirus pandemic. In its Daily Briefing the ICAEW comments:

“After examining HMRC guidance ICAEW believes that individuals who are directors of their own family companies and who are themselves paid via PAYE should be eligible for the coronavirus job retention scheme, although the same rules will apply as to other businesses and their employees.”

 Details of all business support available can be found here.