SJC+0 accountants | Job Retention Scheme
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Job Retention Scheme

 Job Retention Scheme

Update 28 March 2020

Coronavirus Job Retention Scheme for Employers

The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020. The government expects the scheme to be up and running by the end of April 2020. It is designed to support employers who operations have been severely affected by coronavirus (COVID-19).

 

Businesses who are eligible

Any UK organisation with employees can apply, including:

  • Businesses
  • Charities
  • Recruitment agencies (agency workers paid through PAYE)
  • Public authorities

 

You must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.

 

Employees who are eligible

Furloughed employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract, including:

  • Full-time employees
  • Part-time employees
  • Employees on flexible or zero-hour contracts

To be eligible for the subsidy, when on furlough, an employee can not undertake work for or on behalf of the organisation.

 

Employer National Insurance and Pension Contributions

All employees remain liable for associated Employer Insurance contributions and minimum automatic enrollment employer pension contributions on behalf of their furloughed employees.

You can claim a grant from HMRC to cover wages for a furloughed employee, equal to the lower of 80% of an employee’s regular salary or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrollment employer pension contributions on paying those wages.

 

Work out what you can claim

Employers need to make a claim for wage costs through this scheme.

At a minimum,employers must pay their employee the lower 80% of their regular wage or £2,500 per month. An employer can also choose to top up an employee’s salary beyond this but not obliged to under this scheme.

I will issue more guidance on how employers should calculate their claims for Employer National Insurance Contributions and minimum automatic enrollment employer pension contributions, before the scheme becomes live.

 

Full-time and part-time employees

For full-time and part-time salaried employees, the employee;s actual salary before tax,as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.

 

Employees whose pay varies

If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either:

  • The same month’s earning from the previous year.
  • Average monthly earnings from the 2019-20 tax year.

If the employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work.

 

What you’ll need to make a claim

Employers should discuss with their staff and make any changes to the employments contract by agreement. Employers may need to ask to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment.

 

To claim, you will need:

  • Your ePAYE reference number.
  • The number of employees being furloughed.
  • The claim period (start and end date).
  • The amount claimed (per the minimum length of furloughing of 3 weeks).
  • Your bank account number and sort code.
  • Your contact name.
  • Your phone number.

You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.

 

 

Update 6 April 2020

The government is committed to doing whatever it takes to support businesses and individuals through the Coronavirus pandemic. On 20 March as part of these efforts the Chancellor announced the Coronavirus Job Retention Scheme.

This funding will be open to all employers with a PAYE payroll scheme that was created and started on or before 28 February 2020, including charities. Employers can apply for grants of 80% of furloughed employees’ (employees on a leave of absence) monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrollment employer pension contributions on that wage, provided they keep the worker employed. The scheme will cover the cost of wages backdated to 1 March 2020, if applicable.

HMRC have been working night and day to develop this scheme, and we can now confirm that we have been able to publish further details of the scheme on GOV‌.UK. We are aiming to have the scheme up and running by the end of April 2020. More detailed guidance will be published in due course and please be assured we will advise you when the scheme is open.

 

Guidance for employers is available on

https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme 

 

You may also find this helpful.

https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme

 

We recommend you view the guidance which will be updated as the scheme is further developed, and in line with any further government announcements.

In the meantime, we will continue to keep you informed to ensure that you have access to the assistance you need.

 

 

Update 8 April 2020

The Coronavirus Job Retention Scheme (CJRS)

In response to the coronavirus pandemic, the Chancellor announced a series of measures to support businesses and their employees. One of those measures is the CJRS, that allows employers to claim 80% of the wages of staff (up to a maximum of £2,500 per employee) that they have furloughed (been put on temporary leave).

HMRC is working at pace to deliver the service that will allow businesses to make a claim. Businesses, and agents that are authorised to act on behalf of clients for PAYE matters, will be able to claim. However, file only agents, including Payroll Bureaus, will not be able access the service due to data protection reasons.

File only agents

If you are a file only agent, we still need your support. You will need to help your clients, as you might hold information that they need to make their claim. Businesses will need the following information on each of their furloughed employees:

  • National Insurance number
  • Salary
  • National Insurance
  • Pension contribution information that allows business to calculate the claim amount.

 

Service launch

We are ready to launch on 20 April. This will be made public shortly, at which point we will be contacting businesses to advise them what they need to do. At this point we would welcome you also contacting your clients and offering yourselves as vital support during this process, either directly, if authorised, or indirectly if you are a file only agent.

We are expecting phone demand to be beyond our capacity to offer a normal service. Therefore, the service is designed to be self-serve with guidance in place. Again, your support in helping us achieve this is called on.

The upshot of this is HMRC will probably contact you direct and letting you know what to do.
At this point if you are not confident in submitting the information then I suggest you contact me and we go through the process together.
I suspect HMRC will be contacting you soon if it is to launch on 20th April.
I’m here to help.
Update 6 April 2020
I’ve attached a link to a webinar HMRC have run re the Job Retention Scheme. You may have already attended it but if not here is the link:
Please note this is a recording.

Update 14 May 2020

The Chancellor has announced that the Job Retention Scheme (JRS), a lifeline for an estimated 7.5 million employees across the UK, has been extended from 30 June 2020 to 31 October 2020.

This is welcome news for almost one million businesses across the UK who have relied on the scheme to pay salaries, retain their staff and keep their businesses going in these very challenging times.

While there will be no changes to the existing scheme until 31 July 2020, the Chancellor also announced measures to make the scheme more flexible over the coming months, to help ease people back into the workplace. Therefore, from 1 August 2020, furloughed employees will be able to return to work on a part-time basis and from that date, employers will be asked to contribute to the cost of paying their furloughed employees’ wages although details have not been released yet about how much the employer contribution will be. Please note at the moment for Scotland we are still being told to stay at home but hopefully by 1st August we will be encouraging furloughed workers to return to work part time.
For the duration of the scheme, employees will continue to receive 80% of their current salary, up to £2,500.

Full details of the additional measures will be published at the end of May and I will keep you informed on the further details as they emerge.

Given it is likely that most businesses will continue to access much needed cash flow by continuing to make a JRS claim in the months ahead, it is very important that businesses ensure their claims are properly prepared in accordance with the rules.

If I can help please get in touch.

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Don’t bury your head in the sand, talk to me, and stay safe.