Please click here for full details of the guidance.
This article provides additional information and should be read in conjunction with our previous articles which can be found on our website
How to access the CJRS grant
Any entity with a UK payroll and a UK bank account will be able to claim, including individuals, businesses, charities, recruitment agencies and public authorities. A PAYE payroll scheme must have been created or started before the 28 February 2020 and enrolled on PAYE online.
The online service through which claims will be made is due to be available at the end of April 2020.
The claimant, not HMRC, will need to calculate the amount being claimed. Claims should be made using the amounts in payroll either shortly before or during running payroll. Claims can be backdated to the 1st March where employees have already been furloughed. If appropriate, worker’s wages should be reduced to 80% of their salary within payroll before they are paid.
The following information will be needed:
- ePAYE reference number
- the number of employees being furloughed
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
- the relevant bank account number and sort code
- claimant’s contact name
- a contact phone number
After checking the claim, HMRC will pay it by BACS to a UK bank account.
The employer must pay the employee all the grant received for the employee’s gross pay. The employer cannot charge and deduct a fee from the grant.
Any employee you place on furlough must be for a minimum of 3 consecutive weeks. Employees can be furloughed multiple times but each separate instance must be for a minimum period of 3 consecutive weeks. When they return to work they must be taken off furlough.
How much can be claimed?
You can claim for:
80% of your employees’ monthly wages (even for employees on National Minimum Wage) up to a maximum of £2,500
Minimum automatic enrolment employer pension contributions on the subsidised wage.
Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made or when they have been written to confirming their furloughed status.
Grants will also be prorated if the employee is only furloughed for part of a pay period.
For details on how to work out your employees’ wages is different depending on their contract and when they started work. The guidance details:
- Full or part time employees on a salary
- Employees whose pay varies
Who can be furloughed?
The guidance provides further details on those workers who can be furloughed. This includes:
- Employees who were made redundant on or after 28 February 2020 can be re-employed and furloughed.
- A worker whose hours or pay have been reduced but who continues to work cannot be furloughed.
- Foreign nationals can be furloughed.
- An individual employing a nanny or other domestic employee can furlough them as long as they were employed and paid through PAYE on or before 28 February 2020.
- Agency workers may be furloughed. This will be agreed by the agency as the deemed employer, and the worker. Although it isn’t a specific requirement, it is advisable to discuss the need to furlough with any end client involved. If the employee is engaged by an umbrella, the umbrella must discuss the furlough with the worker in the place of the agency. Limb (b) workers can also be furloughed or alternatively they can receive support though the Self-Employed Income Support Scheme where they pay tax on their income as trading profits.
- Other groups who are paid via PAYE may also be eligible for furlough, even though they are not necessarily employees under employment law. For example, an office holder or a member of a Limited Liability Partnership (LLP). The LLP agreement, or in its absence, the Limited Liability Partnership Act 2000, may detail the relationship between the LLP and the individual member, which may need to be varied to permit a member to be furloughed.
Furlough and multiple jobs
Employees cannot work for the employer during the period of furlough leave. This includes anything that makes money for the employer or provides a service – they can however take part in voluntary work and training.
They can work for a different and unconnected employer during this period. An employee with multiple employers can be furloughed by more than one at the same time and in that case, each employment can pay the worker up to the maximum £2,500 at the same time.
If an employer takes on a worker who is currently already furloughed by a different employer, they should complete the starter checklist as usual and complete Statement C.
Employees still have the same rights at work, including:
- Statutory Sick Pay
- maternity and other parental rights
- rights against unfair dismissal
- redundancy payments
Grants cannot be used to substitute redundancy payments.
The HMRC guidance confirms our understanding that directors, including those who are directors of their own personal service company, can be furloughed.
If you would like further information on the updated guidance or would like to discuss your current employment situation, please contact our specialist employment solicitor, Lisa Aitken for free initial advice on 07960 469988 or email: LisaA@moore-tibbits.co.uk