The Government’s scheme to help pay people’s wages in order to ensure that they don’t lose their jobs during the coronavirus pandemic has gone live today.
Businesses who claim through the Coronavirus Job Retention Scheme (JRS) will be able to pay their staff 80% of their normal earnings, capped at £2,500 a month per worker.
As many as 11.7 million people could be furloughed or unemployed over the next three months with employees in the lowest-paying hospitality and retail sectors most likely to be affected, the Resolution Foundation found.
If you have been put on furlough because of coronavirus, your employer can claim for 80% of your wage plus any employer National Insurance and pension contributions – here’s how.
Employees put on furlough do not need to do anything as their employer is responsible for making claims. Individuals cannot apply for the scheme themselves.
The government’s website states that before applying for money through the JRS, employers must first check they and their employees can use the scheme – this can be done online here.
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To work out how much you can claim, use the Coronavirus Job Retention Scheme calculator.
To make a claim, you will need:
- to be registered for PAYE online
- your UK bank account number and sort code
- your employer PAYE scheme reference number
- the number of employees being furloughed
- each employee’s National Insurance number
- each employee’s payroll or employee number
- the start date and end date of the claim
- the full amount you’re claiming for including employer National Insurance contributions and employer minimum pension contributions
- your phone number
You also need to provide either:
- your Corporation Tax unique taxpayer reference
- your Self Assessment unique taxpayer reference
- your company registration number
Companies that are putting more than 100 employees on furlough will need to upload a file on every employee being furloughed.
How to apply
Visit the gov.uk website. You’ll need the Government Gateway user ID and password you got when you registered for PAYE online.
Once you’ve claimed, you’ll get a claim reference number. HMRC will then check that your claim is correct and pay the claim amount by Bacs into your bank account within 6 working days.
- keep a copy of all records, including: the amount claimed and claim period for each employee, the claim reference number for your records and your calculations in case HMRC need more information about your claim
- tell your employees that you have made a claim and that they do not need to take any more action
- pay your employee their wages, if you have not already
Launching the scheme, Chancellor Rishi Sunak said: ‘Our unprecedented job retention scheme will protect millions of jobs across the country and is now up and running.
‘It’s vital that our economy gets up and running again as soon as it’s safe – and this scheme will allow that to happen.’
Approximately 5,000 HMRC staff will operate the scheme, intended to assist thousands of UK firms, with the money due to reach bank accounts within six working days.
Phone lines and web-chat services will be available to help answer applicants’ questions.
The scheme covers wages until the end of June, in light of the ongoing coronavirus lockdown.
In its report titled Launching An Economic Lifeboat: The Impact Of The Job Retention Scheme, the Resolution Foundation said the JRS would mitigate the impact of Covid-19 – but warned unemployment is still likely to soar to 3.4 million.
What is furlough?
If you are furloughed then your employer is keeping you on the payroll while a business has less work than normal. You cannot work for or on behalf of your employer while on furlough.
Who is eligible?
Any UK organisation with employees can apply for the furlough scheme as long as they had set up a payroll scheme before February 28.
This means that people who work for businesses, charities and public authorities will be entitled to the money if their employer signs up.
If you started your job after February 28, 2020, then you are not eligible for the scheme. If you were made redundant since February 28, you can be put on furlough if your employer rehires you.
How much will I get paid?
Businesses will be able to pay their employees 80% of their regular monthly wage, or £2,500 a month, whichever is lower.
If on the scheme, your employer must pay you at least the 80% of your usual income, however they are also free to top this up if they wish.
This means that if you earn £24,000 a year, you will earn a gross income of at least £1,600 a month on the furlough scheme.
How long will it last?
The Coronavirus Job Retention Scheme was originally intended to run to June 1, 2020, however it has been extended until at least the end of that month.
Do I still pay tax?
While on furlough your wage will be subject to the usual income tax and other deductions, the Government guidance says.
What are my rights?
You retain the same rights you had while at work – so are still entitled to statutory sick pay, maternity and other parental rights, the right against unfair dismissal and redundancy payments should you lose your job.
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