This afternoon the Chancellor announced that the Government is going to cover up to 80% of the current wage level of an employee who is designated as a “furloughed” worker, due to the Coronavirus pandemic, provided they are kept on the employer’s payroll. There will be a ceiling of £2,500 a month on salaries to which this applies. Employers can still top up salaries above this level if they choose to.
In an unprecedented move, the new Coronavirus Job Retention Scheme will apply to all employers, and will be backdated for those who have been unable to work since 1st March 2020. The Scheme is expected to last for at least 3 months, will likely be extended, and is part of the Government's measures to protect jobs at the present time. We await much of the detail of how this Scheme will work in practice.
HMRC will be setting up an online portal on which employers will submit information about the employees that have been furloughed and their earnings and other details which are still to be confirmed. HMRC hopes to be able to make the first grants under the Coronavirus Job Retention Scheme within weeks and they are aiming to have the portal up and running before the end of April. In the meantime it is encouraging those who may face short term cash flow problems to consider if they qualify for a Coronavirus Business Interruption Loan.
The Government hopes that this welcome development, along with the deferral of the next quarter of VAT payments until the end of the financial year and the fact that the Business Interruption loans will be interest free for 12 months means employers are being encouraged to consider carefully the support available to them before cutting jobs.
If you have any questions on these new announcements or would like to know more about how you might access support at this time please let me know and I will get one of our Employment specialists to contact you.