In The News
The Government have published more details about the Coronavirus Job Retention Scheme will operate. It is a very detailed set of guidelines enabling employers and employees to have a clear understanding of the way forward.
There are some oddities and there are certain contrasts to those self-employed that may well need a little more clarification in due course.
Is an employee covered by the scheme?
The full details are set out in the attached link.
Payments are made subject to the following details;
Can employees work during Furlough?
The definition of Furlough has been made clear. Once on furlough an employee can’t work for the company.
This scheme therefore does not apply to employees working on reduced hours or for reduced pay. Once an employee is no longer able to work for an employer, they can continue training but must not make money for the employer or provide a service for the employer.
Employee rights are not affected by being on furlough.
Employees can reject being put on furlough but should they do so the employee may be at risk of being made redundant which must be carried out in line with normal redundancy rules and protections (statutory redundancy and notice periods).
Any business is eligible who has employees.
Employers will be eligible to claim the furloughed employee’s wages and the cost of the employers NIC and the auto enrolment pension cost of 3% associated with paying the furloughed wages. Any additional pension contribution that the employer chooses to make must be made by the employer and cannot be claimed.
In order to make a claim, an employer must;
Claims can be submitted every three weeks and make the claim in accordance with actual payroll amounts at the time when the payroll is run or is imminent
Employers must pay the employee the entire grant received subject to the PAYE and pension deductions.
HMRC will retain full rights to retrospectively audit all aspects of a claim.
Finally, Coronavirus Job Retention Payments are a grant, not a loan. They should be recorded as additional income of the accounts and CT 600 of the business.
The scheme is unbelievable, in terms of its scope, in terms of its aim to support businesses and employees and in terms of the funding levels. It would harsh to be critical but there are some areas that do need to be tweaked;
reflect the way in which Government wishes to manage these types of workers in future.
In case of any questions please contact at Chris.Cummings@ase-global.com
Tel: +44 (0)161 493 1930