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Job Retention Scheme

Following on from the Government public announcement of the grant available for staff that are furloughed more details were published yesterday and can be found by clicking the link below:

Read the latest Job Retention Scheme here 

It is designed to support employers whose operations have been severely affected by coronavirus.

The main point is that furloughed staff cannot undertake any work for you. This includes provision of services or generation of income.

If an employee is on reduced hours or reduced pay they will not be eligible for the 80% grant.

The scheme applies to any type of contract including:

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

You must write to your employee to explain that they have been furloughed and keep a record of communication.

Any employee hired after 28 February is not eligible.

The grant will be based on actual salary before tax as of 28 February 2020. Fees, commissions and bonuses are not included.

The grant available is based on the lower of 80% of staff actual salary as at 28 February 2020 or £2,500 plus employers national insurance and minimum automatic enrolment contributions are also included. You can top up the payment but an employee must remain furloughed for what appears to be a minimum of three weeks. The member of staff is still subject to tax and national insurance.

Any top up including employer’s national insurance will not be funded.

Many of you will engage self-employed secretarial services. On the 26 March 2020 details of grants for self-employed was announced. They should seek advice from their own accountants on their eligibility.

The situation is fluid and many questions are raised about limited companies and directors.

Many people will be on the payroll of their company but at reduced salary or have a spouse or other family members as well. They too would appear to be eligible provided no work is undertaken after they are furloughed. The Revenue have stated they will undertake retrospective audits.

Unfortunately, dividends are not included as earnings for the purpose of this grant.

Once HMRC have received your claim and you are eligible for the grant, they should pay it via BACs payment to a UK bank account. We expect this to be in April.