Employer Retention Scheme Information COVID-19

We are sending you some useful information about the Job Retention scheme introduced by HMRC.

Here is what you have to do now in order to be ready when the online platform opens at the end of April

  • Decide now which of your employees need to be included in the scheme. You can change the workers on the scheme after 3 weeks from the date you make the first application. Have in mind that the purpose of the program is to help you keep your workers in case your company is struggling. If there is no reduction in trading then the claim is not appropriate and can be treated as fraud. You can furlough some workers and leave the rest on a full time basis. Minimum period to stay in the program is 3 weeks, after that you can change the people on the grant scheme.
  • Write a letter or an email to all of your employees who you think to put on furlough and to enter them for 80% grant. There must be an agreement between you and the worker. We are attaching a sample letter that you can use. It is very important to keep this correspondence as evidence .
  • Write us an email as soon as possible with the names of your workers entering the scheme so we can update the payroll.
  • Write us a separate email if you want our help with the online applications. Give us your bank account details to claim the grant as well as all workers’ information.
  • If you are a Company Director – you have the same rights as the other workers under PAYE but you have to decide and tell us if you plan to enter the scheme yourself. If you do this means you cannot work at all during this period. For sole Directors with no employees this would mean stop trading completely.

Some useful points.

– Furlough employee is anyone who has been put on a period of unpaid leave during which they are not working for you but you do not want to terminate their contract

– Eligible employees – full time, part time, flexible or zero contracts

– Non – eligible employees – those put on unpaid leave on or before 28/02/20 or new employees after 28/02/20

  • If you enter the scheme you have to include all of the furloughed workers in one application. Every 3 weeks you have to send a confirmation statement and tell HMRC of any changes
  • You have to decide if you want to top up 20% to the 80% government help. You are not obliged to do that.
  • The grant is taxable income for the employer
  • The grant of 80% will cover NIC and 3% pension for the period
  • The  government grant is 80% of the regular wage
  • Your workers must have been on payroll on or before 28/02/20. If you have new employees after that date they cannot enter the scheme.
  • Your workers on furlough must not provide any services for you under any form even if they offer to do volunteering work for you.

If you have any questions please send us an email. We are ready to help you.

Please find a sample letter how to notify your employees here.