The UK Government will be implementing the Coronavirus Job Retention Scheme as part of its measures to combat the economic impact of the coronavirus crisis. This guide explains how it may affect you.
As things change rapidly during the coronavirus (COVID-19) crisis, this guide will be updated regularly to reflect changes in rules and regulations.
Businesses who put their employees on furlough will be able to claim grants to cover 80% of their employees’ salaries, capped at £2,500 per month. This is to allow businesses to remain solvent without having to make staff redundant.
If you are put on furlough it means that you are no longer required to come into work or do your job. You remain an employee of the business and on payroll, ready to come back to work once the lockdown is lifted.
You must not provide any service to your employer while furloughed or make them any money, though you can still do voluntary work and training.
All full-time, part-time, zero hours or agency staff can be furloughed as long as you are paid through PAYE (pay as you earn) and were on the company’s payroll on or before 19 March 2020.
If you want to be put on furlough you should discuss it with your employer, but employees cannot demand to go on furlough.
If you stopped working for your employer between 28 February 2020 and 19 March 2020 as a consequence of the coronavirus crisis, your former employer can rehire you to put you on furlough.
You must be furloughed for a minimum of three weeks in order for you to be eligible for the scheme. If you are called back to work after less than three weeks, you employer will need to pay you. At the moment the scheme runs until October 2020, but the government have said it may continue.
No. Existing employment law still applies. You must agree for your employer to put you on furlough, though alternatives are likely to include redundancy.
To claim as part of the scheme your UK business, charity, recruitment agency or public authority must hold a UK bank account and have been trading since 19 March 2020. You will also need an ePAYE reference number.
You must notify your staff in writing if you plan to put them on furlough, and they must agree.
Yes. If you are a director of a UK business you can claim your own PAYE salary through the scheme, but not any bonuses or dividend payments. However, you must not provide a service or earn your company money during your furlough period.
Your employer can claim 80% of your core salary, up to £2,500 per month. Your core salary does not include bonuses, dividends or commission.
Your employer can also claim their statutory pension and national insurance contributions through the scheme, though you will still pay national insurance and income tax as normal.
Your employer may choose to pay your full salary by topping up the grant, but they do not have to. If you have multiple employers, each one can claim up to £2,500 to fund 80% of your monthly salary.
If you are paid an irregular monthly salary, the grant will be calculated by either your average core salary from the 2018-19 tax year or your pay from the same month last year, whichever is higher.
Update: From August, employers cannot claim National Insurance and pension contributions. In September, employers can only claim 70% of wages and must pay 10%, rising to 20% in October with the state paying 60%. At the end of October the scheme will end.
Employers will need to submit claims using the UK Government portal. You can only submit 1 claim every 3 weeks.
To claim you will need to submit:
An ePAYE reference number
The number of employees you are putting on furlough
The dates you are claiming for
The amount your are claiming
Your bank account number and sort code
A contact name and number
HMRC reserves the right to retrospectively audit claims.
Your employer should pay you as usual during your furlough, then claim back the money through the scheme.
Until October 2020 for now, though the government has said it may be extended. Payments can be backdated to the first day of an employee’s furlough up to 1st March 2020.
Even if you are paid minimum wage, you may still only receive 80% of your salary if you are furloughed as part of the scheme. You are still able to take on work while on furlough, so long as your employment contract allows it. Many industries have been left short staffed by the coronavirus crisis.
You can also supplement your furlough earnings with in-work benefits such as Universal Credit payments.
You will continue to receive statutory minimum payments and your employer will be able to claim any additional salary you receive through the scheme.
Find out more about your parental leave and pay rights here.