COVID-19 and Job Rentention Scheme: Your Summary Update 20-04-2020

By admin In COVID19 On April 20, 2020

Since we’ve been in lockdown, many businesses have needed to close. Most of those within the service industry like restaurants and pubs, retail workers, and most in manufacturing have been unable to work and have been placed on furlough. So how do you get paid?

Guidence for self employed

The furlough scheme was created in the hopes of protecting both workers and the UK economy as the lockdown prevents life and work as normal.

When the scheme was announced earlier in the lockdown, people were unsure and rightly worried about how it would work for their jobs and businesses. The Job Retention Scheme is thankfully now available for all businesses to apply for help to secure funds for furloughed workers.

What is the Job Retention Scheme?

It was announced last month by chancellor Rishi Sunak in an effort to curb mass redundancies caused by the COVID-19 lockdown, and protect the economy in the long term. It covers the bulk of wages and salaries due to staff placed on leave (furloughed).

It was estimated by the Office for Budget Responsibility to cost the government £42 billion, but that estimate was given before the scheme’s extension to the end of June, so it will now be considerably higher.

How do you claim?

Only employers can claim, not employees. Business owners can start the process via the HM Revenue & Customs portal here: gov.uk/gui…eme

How does it work?

  • Businesses can claim 80% of an employee’s monthly salary, up to a maximum of £2,500 per month.
  • The sum secured has to be passed on in full by the employer to the employee. The employer can also top up that wage if able or willing to do so.
  • It will be taxed in the usual way for the relevant amount.
  • The scheme also covers National Insurance and pension contributions.
  • Employment rights, such as sick and holiday pay, remain in place as normal.

Employers can only claim for employees that were on the company’s payroll on or before 19 March, and only those placed on furlough (not working) are eligible. Anyone who started employment after 28 February 2020 or has been made redundant since that date are not entitled to payment.

When will you get the money?

Most importantly, it should be available to your employer very quickly. According to Sky News, “it will take up to six working days to process a claim and pay the money to a company’s bank account.”

This means there should be time to spare if an employer’s pay day is at the end of the month.

Thankfully, HMRC has 5,000 staff working solely on the project, not only to support applicants but also detect any fraud. HMRC staff have been testing the new claim system at volumes of 450,000 users per hour.

Phone and web chat support is available, but claimants are being advised to use these services sparingly. Patience is key at this time.

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