Coronavirus Job Retention Scheme – The Key Facts

Category: COVID-19EQ News - Posted On: Mar 30 2020

Under the Coronavirus Job Retention Scheme, UK employers will be able to access support to continue paying part of their employees’ salaries for those who would otherwise have been laid off during the ongoing COVID-19 pandemic.

Described as “furloughed workers”, the employees are those that the employer cannot afford to pay due to coronavirus and as such, they have been asked to stop working temporarily but have not been made redundant.

The Coronavirus Job Retention Scheme will initially run for at least 3 months from 1 March 2020 but will be extended if necessary.

For employers to be eligible, they must have created and started a PAYE payroll scheme on or before 28 February 2020 (HMRC have updated this date to 19 March 2020) and have a UK bank account.

You can download our ‘Coronavirus Job Retention Scheme Factsheet‘ to find out more about how the scheme will work, and what you need to be eligible to make a claim here.

It is important that employers have a discussion with affected employees, then follow up with a written letter or email, confirming they have become “furloughed workers”. You can find an example letter here.

It is expected that employers borrow or self-fund in the short term to provide the wage package before the grant can be claimed. This will be backdated from the date the employer has recorded.

If a business needs short term cash flow support, it may be eligible for a Coronavirus Business Interruption Loan. You can find out more on this here.

The submission of a claim will be through a new online portal which is expected to be live before the end April. We expect further information and guidance from HMRC in the coming weeks. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

HRMC has issued further guidance on a variety of different circumstances which you can find here.

For further guidance and support, please get in touch with your usual EQ contact via email or phone. We are here to help as much as we can throughout this difficult time.