Published 25/03/2020, 15:00
Last Friday (20/03/2020) the Government announced the creation of a new scheme to support employers to retain their workforce, and ensure their workers receive a portion of their salary while not working due to the impact of COVID-19.
The Furlough scheme allows for employers to pay 80% of wages or up to £2,500 per month, to be paid in a grant through HMRC.
- The Furlough scheme is available to all companies – Ltd’s, LLP’s, Charities and Sole Traders.
- A Furloughed worker must be a PAYE employee with a Contract of Employment containing clauses regarding Lay-off.
- The Furlough scheme is available for an initial 3 months, back dated to the 1st March 2020.
- Applications are made by Employers to HMRC through a dedicated portal, where employee data including names, national insurance details and pay will be submitted. HMRC will then process and pay the relevant grant to qualifying Employers.
It’s important to note this portal is not yet available and payments may not be paid out until early April 2020.
- There is currently no obligation for employers to top this up to full pay.
- The cap of £2,500 has been set as the median salary in the UK
An important lifeline to businesses this scheme could help you prevent unpaid lay-offs and redundancies while securing your workforce for the future.
It is essential the furlough process is managed correctly to ensure both you and your employees are protected.
We expect there to be stringent anti-fraud measures and we warn all business owners that in the event of abuse of the system, they should expect public naming and shaming for what will be, after all, a form of illegal profiteering from a national crisis. We expect heavy penalties to follow for those who abuse this benefit.
We will keep you updated when further information becomes available. In the meantime, please contact us on 03456 122144 if you need help.