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Covid-19 Job Retention Scheme

Business owners who are experiencing a loss of revenue and unable to pay their workforce due to Covid-19 can avoid making team members redundant by declaring them as on furlough or temporary leave.

The employer can apply for a government grant which pays 80% of the salary of up to £2,500 per employee.

As well as job security, the benefit also covers the minimum automatic enrolment employer pension and employer National Insurance contributions.

Employers may increase the wages they pay to their furloughed workers.

Furloughed employees are allowed to work for other businesses but not for the employer who filed for the financial assistance claim on their behalf.

Payments from 1 March 2020 until 31 October 2020 are included in the Covid-19 Job Retention Scheme. Claims can be filed using an online application portal where they are guaranteed to be paid out within 6 business days. Furloughed employees should be notified about their status in the meantime by their employers.

Who is eligible?

All registered UK employers are eligible for the Covid-19 Job Retention benefit but they are required to have had a Real Time Information submission made to HMRC by 19th March and must have already been on the payroll by 28th February.

What are the requirements?

  • Name of the Employee
  • Government Gateway (GG) ID and password
  • National Insurance number
  • Claim amount and claim period
  • PAYE/employee number (optional)

If the total number of furloughed employees are less than 100, employers need to enter their full details on HMRC’s system directly. Otherwise an .xls, .xlsx, .csv, .ods file containing information for each employee must be uploaded manually by the employer.

What if an employee does not have a National Insurance Number?

Contact the COVID-19 Helpline on 0800 024 1222 if you are an employer that has less than 100 furloughed workers with one or more who do not have a National Insurance Number, to get help with processing claims.

For a company with over 100 workers that were furloughed with several who do have a National Insurance number,  payroll or employee reference numbers must be provided by the employer for them.

Claiming benefits on behalf of furloughed employees can also be done by agents authorised with HMRC by their clients to act on PAYE matters.

How the Scheme is Changing

Businesses will be given the flexibility to bring furloughed employees back part time from 1st July 2020.

The task of paying employees’ wages while in work along with their hours and shift patterns will be shouldered by the Individual firms.

The CJRS grant will start to be tapered by August 2020

August: 80% of wages up to a cap of £2,500 will be paid by the government while ER NICs and pension contributions will be paid by employers

September: Contributions made by the government will go down to 70% of wages up to a cap of £2,187.50. Paying ER NICs and pension contributions along with 10% of wages to make up 80% total up to a cap of £2,500 will be handled by the employer.

October: 60% of wages up to a cap of £1,875 worth of contributions will be paid for by the government. Meanwhile ER NICs, pension contributions and 20% of wages to make up 80% total up to a cap of £2,500 will be looked after by the government.

Important note:

For employers to claim CJRS entitlement benefits:

Furlough periods of at least 3 consecutive weeks ending on, or before, 30 June must be demonstrated by employers.

Claims cannot be made by employers for employees whose first period of furlough starts after 10 June.

Only on July 1 can a first time employer be allowed to make claims for days in July.

Employee’s Consent

You will need your employee’s agreement before they are furloughed, changing the status of employees remains subject to existing employment law.

Follow this link to find out more about The Corona virus Job Retention Scheme.

What is a VAT payment deferral?

VAT payments due between 20 March—30 June 2020 can be deferred until 31st March 2021.

Interest for late payment and penalties will not be imposed during the dereal.

Normal payments will be made for the VAT refunds and reclaims.

Who can apply?

The VAT payment deferral includes all VAT registered UK businesses.

Where to apply?

The deadline for 2019/20 VAT payments has been extended to the end of the 2020/21 tax year, so no VAT payments are due before 30 June 2020. This is an automatic offer and there’s no need to apply.

Additional Information

If you cancelled your Direct Debit payments for VAT the DD now needs to be reinstated.

Additional information can be found on the government website about the Deferral of VAT payments.

What is a Time to Pay Scheme?

It’s a direct arrangement with HMRC allowing for a debt repayment plan for outstanding taxes.

The arrangement is tailored to individual circumstances and liabilities and agreed by HMRC on a case-by-case basis.

Arrangements should be made with HMRC before payments become overdue to avoid penalties.

Payment delays

If you have already missed a payment or might miss your next payment due to COVID-19 please contact HMRC on 0800 024 1222.

If you would like our help with any aspect of the Coronavirus financial assistance schemes please call us 01904 404560 or email us on info@sjperry.org