COVID-19: Job Retention Scheme update

GreenKite’s Paul Leach summarises the latest UK Government advice on the Job Retention Scheme.

• HMRC will review the claim and if eligible, pay it via BACS payment to your UK bank account. Employers can reclaim up to 80% of gross wage costs up to a maximum cap of £2,500 per month, plus (not including) the associated employer NICs and minimum auto-enrolment pension contributions on that wage.  Fees, commissions and bonuses are not included. Furloughed earnings are subject to Income Tax, National Insurance, and Pension contributions (if applicable) in the normal way.
• The scheme is open to all UK employers that had a PAYE payroll scheme running on 28 February 2020.
• The scheme includes full-time employees, part-time employees, employees on agency contracts and employees on flexible zero-hour contracts.
• Redundancies after 28 February 2020 can be negated if the employee is re-hired.
• SSP due to sick leave of self-isolating overrides being on furlough. You will need to keep evidence of employee sick claims and ensure there is no fraudulent behaviour as part of your normal contractual obligations. They may be re-furloughed after illness or return to work if possible.
• Furloughed employees are permitted to do training (online or home study) whilst they are furloughed, provided they are not making money for their employer or providing services to their employer. They must be paid the equivalent of NLW/NMW even if this is more than the 80% of their wage that will be subsidised.
• The employee’s actual salary, as of 28 February should be used to calculate the 80%. Furlough leave must be taken in minimum blocks of three weeks to be eligible for funding.
• There is nothing in the guidance which prohibits rotating furlough leave amongst employees, provided each employee is off for a period of at least three weeks.

This summary is an overview of latest UK Government advice, however for sake of clarity, any specific HMRC related advice should be sought by contacting HMRC or your accountants.