Coronavirus: What Employers and Employees Should Know
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FAQs - Job Retention Scheme
What does Furlough mean: The word means ‘temporary leave of absence from work’. The meaning has been introduced by the Government to mean leave offered which keeps employees on the payroll without them working and is designed to support employers impacted by the Coronavirus. This has been aptly named the ‘Job Retention Scheme’.
Which employer is entitled to the Job Retention Scheme: Almost Any Employer (no matter their size) will be eligible including charitable and non-profit organisations. For Employees to be eligible they must on the Employer’s payroll, however a employee must have been placed on the payroll since 28th February 2020. The scheme is not limited to employees on full-time contracts, it can also be made available for those working Temporary Contracts, Zero-Hour Contracts and for Agency Workers (providing they are on the payroll of their respective recruitment agencies).
Who is generally excluded from the scheme: The Government do not intend that the scheme will be used by the majority of Public Sector Organisations and where Employers receive Public Funding for staff costs it is expected that the funding will be used to continue paying staff as normal. However, the Scheme will not apply to the Self-Employed and to those on Sick Leave or those Self-Isolating because of the Coronavirus, but they can be furloughed after this.
Are you expected to work if you’re Furloughed: Once an employee has been furloughed they must not work for the employer during the period which they have been placed on furloughed. The expectation is that many employees will be permitted to return to their job as usual after the furlough period has been lifted. It should be noted that Employees may undertake training or volunteering, providing they are not (1) making money for their Employer or (2) providing services to their Employer.
Can you be re-employed If you have already been made redundant: Employers can agree to re-employ Employees who have been made redundant after 28th February 2020 and place the Employee on furlough instead. The Employer will still be able to claim a grant to cover 80% of the employer’s monthly earnings, subject to the cap of £2,500.00.
What is the entitlement under the Scheme: Employers will be able to get a grant to cover 80% of their employee(s) monthly earnings, up to a maximum of £2,500.00. A claim can be made for the minimum of 3 weeks and for up to 3 months (although this could be extended). In addition, those placed on the furlough will still pay Income Tax, National Insurance and any other applicable deductions from their wages and Employers can choose to pay their Employees more than the 80% grant, but this is at their discretion, so they can choose not to.
FAQs - Support for Businesses
The Government have announced a series of measures to support businesses during the Coronavirus Outbreak.
Below are a list of some of the measures introduced with a brief description of what they are and how it may help businesses:
The Job Retention Scheme: The Coronavirus Job Retention Scheme (JRS) enables businesses and employers with a pay as you earn scheme (PAYE) to continue paying employees’ salary and associated costs, where otherwise they would have either been laid off or made redundant. The Scheme will see the HM Revenues and Customs reimburse 80 percent of their wages up to £2500.00. The scheme has been backdated to 1st March 2020 and has been put in place for the next three months’. For more information read our latest article here.
Deferring VAT Payments: The HMRC have announced that UK VAT Registered businesses who have a VAT payment due between 20th March 2020 and 30th June 2020 will have the option of deferring the payment until a later date.
Deferring Self-Assessment: The HRMC will permit those due to pay a self-assessment payment on account by 31st July 2020 to defer payment until January 2021. However, eligiblity rules do apply and the deferment remains optional.
Statutory Sick Pay Rebate: The Government have announced that small and meduim sized businesses will be able to reclaim SSP for sickness absence due to the Coronavirus. The rebate will refund up to 2 weeks’ SSP per eligible employee who has been off work. For full details of the rebate scheme read here
Business Rates for Retail, Hospitality and Leisure Businesses: Properties that are wholly or mainly used in the hospitality sector including retail will be entitled to a business rates holiday for the tax year 2020 to 2021. If you qualifiy you do not have to do anything as local authorities are in the process of implementing the scheme and this may result in the reissuing of bills.
In addition to Business Rates relief for certain sectors of the economy, the Government also announced the ‘Retail and Hospitality Grant Scheme’ which can see a cash grant of £25,000 per property and ‘Small Business Rate Relief’ for funding of £10,000.00. Eligibility criteria do apply and further information for such support can be found here.
The Coronavirus Business Interruption Loan Scheme: this new scheme is intended to support small to medium businesses with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to 6 years’. The first 12-months of interests and associated lender fees will also be covered by the Government. In addition, the Government have announced added security to lenders through a guarantee of 80% of each loan. If you believe that your business would benefit from an interruption loan, it is strongly recommended that you speak and obtain advice from your current financial advisors accountants or seek professional assistance.
Insurance: It is also recommended that businesses look at their commercial insurance policies to see whether they are covered for pandemics, diseases and/or government ordered closures. If in doubt you should check the terms and conditions of your policy or contact your current provider.
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