Applications are now open for businesses to secure cash through the government’s Job Retention Scheme.
Here is a simple guide to explain what it is for and how to do it.
What is the Job Retention Scheme?
This is the vehicle announced by the Chancellor Rishi Sunak last month to prevent mass redundancies caused by the COVID-19lockdown and protect the economy in the long term.
It covers the bulk of wages due to staff who have been furloughed – placed on leave. Before the scheme was extended until the end of June, the Office for Budget Responsibility estimated the bill at £42bn.
How can I claim?
Only employers, not employees, can submit claims under the Job Retention Scheme.
It is done via an online portal operated by HM Revenue & Customs here.
How much can be claimed?
Businesses can request 80% of a member of staff’s regular monthly salary, up to a maximum of £2,500.
The sum secured has to be passed on in full by the employer to the employee. The employer can also top up that wage if able or willing to do so.
It will be taxed in the usual way for the relevant amount.
The scheme also covers National Insurance and pension contributions.
Employment rights, such as sick and holiday pay, remain in place as normal.
Who is eligible?
Employers can only claim for furloughed employees who were on a company’s PAYE payroll on or before 19 March.
Only workers who have been retained by, but are not completing work for, their company can be covered.
Two other points of note: Anyone starting their job after 28 February is not eligible and those made redundant since that date can receive money if they are technically re-hired and placed on furlough.
When will I get my money?
It is hoped it will take up to six working days to process a claim and pay the money to a company’s bank account.
It means there should be time to spare if an employer’s pay day is 30 April.
HMRC has 5,000 staff working on the project to not only support applicants but also detect any fraud.
The Taxman has been testing the new claim system at volumes of 450,000 users per hour.
Phone and web chat support is available, but claimants are being advised to use these services sparingly.
How long does the scheme run for?
It has already been extended to the end of June.
Much will depend on how long restrictions on movement remain.