What is it?
The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least 3 months starting from 1 March 2020. It is designed to support employers whose operations have been severely affected by coronavirus (COVID-19).
Employers can claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage. Employers can use this scheme anytime during this period.
Are you eligible?
All UK-wide employers with a PAYE scheme that was created and started on or before 28 February 2020 will be eligible including:
- Recruitment Agencies (agency workers paid through PAYE),
- Public Authorities
The employer must have a UK bank account.
How do you access it?
You will need to:
- Designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
- Once the new online portal is live, submit information to HMRC about the employees that have been furloughed and their earnings.
When can I access it?
HMRC are working urgently to set up a system to pay these grants. HMRC aim is to get this done by end of April.
Can company Director(s) be Furloughed?
Yes, Company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.
Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.
Where can you see the detailed guidance?
Details guidance can be found in here:
- Director Service Contract
- Employment Contract
- Furlough Agreement Letter
- Our Guide on CJRS
- Board resolution