- The Job Retention Scheme has been extended until September 2021
The Job Retention Scheme has been created to help employers cover the cost of wages during COVID-19 for employees and to retain jobs.
The scheme has been extended until September 2021.
The scheme has been extended until September 2021. Until July 2021, the government will pay 80% of wages up to a cap of £2,500 and employers will pay employer National Insurance Contributions (NICs) and pension contributions only for the hours the employee does not work. Flexible furloughing will be allowed in addition to full-time furloughing.
Any business with a UK payroll can apply, including charities, recruitment agencies and public sector organisations, as long as:
Claims can be made for any employee or apprentice on any kind of contract, as long as they were on the payroll on or before 19 March 2020. Any employee hired after this date cannot be furloughed.
If your employee is on unpaid leave, If an employee started unpaid leave after 28 February 2020, you can furlough them and can claim their wages through the scheme.
If an employee is sick or self-shielding, if they are sick they will be eligible for Statutory Sick pay (costs for two weeks can be claimed back by the employer) after their sick leave they can be furloughed and paid for through the scheme. If they are self shielding, they can be furloughed and claimed for through the scheme.
Employees can volunteer or undertake training while furloughed, as long as the training does not generate income for the business.
If you made employees redundant or they stopped working for you after 28 February, you can re-employ them, put them on furlough and claim for their wages through the scheme.
This applies to employees that were made redundant or stopped working for you after 28 February, even if you do not re-employ them until after 19 March. This applies as long as the employee was on your payroll as at 28 February and had been notified to HMRC on an RTI submission on or before 28 February 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 28 February 2020.
As office-holders, salaried 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.
Members of LLPs who are designated as employees for tax purposes (‘salaried members’) under the Income Tax (Trading and Other Income) Act (ITTOIA) 2005 are eligible to be furloughed and receive support through this scheme.
You’ll still need to pay employer National Insurance and pension contributions on behalf of your furloughed employees, and you can claim for these too.
You cannot claim for:
You can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.
Employees will still pay the taxes they normally pay out of their wages. Including pension contributions (both employer contributions and automatic contributions from the employee), unless the employee has opted out or stopped saving into their pension.
The amount you should use when calculating 80% of your employees' wages is regular payments you are obliged to make, including:
You cannot include the following when calculating wages:
The scheme is open for claims. You will receive payment six working days after making an application.
Employers should agree changes with employees and changes to employment contracts, formally in writing. Not all employees need to be placed on furlough if your business is still operating. A furloughed employee can not undertake any work for the employer.
Employers can claim 80% of employees wages, including National Insurance Contributions and and automatic pension contributions.
Employers can top up a salary should they wish.
To make a claim, employers will need:
The following information is required for each employee:
If you have fewer than 100 furloughed staff – you will need to input information directly into the system for each employee.
If you’re claiming on or after 1 July 2020 for 100 or more employees, you’ll need to upload a file. A template is available for you to fill in.
Employers will need to calculate the amount they are claiming. HMRC will retain the right to retrospectively audit all aspects of a claim. Claims can be backdated to 1 March 2020.
HMRC will check your claim, and if you’re eligible, pay it to you by BACS to a UK bank account.
You must pay the employee all the grant you receive for their gross pay, no fees can be charged from the money that is granted.
If you have made an error in a claim that means you’ve received too much, you must pay this back to HMRC. You can either:
If you’ve overclaimed a grant and have not repaid it, you must notify HMRC by the latest of either:
If you are making another claim then you can tell HMRC about an over claimed amount as part of this. When you make your next claim you will be asked whether you need to reduce the amount to take account of a previous over claim. Your new claim amount will be reduced to reflect the over claimed amount and you should keep a record of this adjustment for 6 years.
If you have made an error that has resulted in receiving too little money, you will still need to ensure you pay your employees the correct amount. You should contact HMRC to amend your claim. As you are increasing the amount of your claim, we may need to conduct additional checks.
You are no longer be able to amend a claim relating to the period up to 30 June to add an employee that should have been included on a claim submitted before that date. You must make sure that any remaining claims still to be made for the period to 30 June include all of your eligible employees. Amendments for any other errors you made that resulted in you not claiming enough will still be permitted.
When the government ends the scheme, you must make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).
HMRC will process all claims made before the scheme ends.
Do not contact HMRC unless it has been more than 10 working days since you made the claim and you have not received it in that time.
If you need to contact HMRC after 10 working days, you can call 0800 024 1222 or you can chat online with an advisor.
The AND business team is here to support you.
For further information or if you need help and advice, please get in touch via email or telephone 028 9147 3788.