The application process for furloughed workers has now opened via the PAYE online portal. You can claim online for a grant for 80% of your furloughed employees’ salaries. This is up to a maximum of £2,500 per employee, per month. The Coronavirus job retention scheme (CJRS scheme) will remain open until 30th June 2020.
To apply for the grant, you will need to be registered for PAYE online. You will also require the following information:
- Your UK bank account number and sort code
- Your employer PAYE scheme reference number
- The number of employees being furloughed
- Each employee’s National Insurance number
- The start date and end date of the claim
- The full amount you’re claiming for. This can include employer National Insurance contributions and employer minimum pension contributions, but not fees, commission and bonuses.
It can take up to six working days after your application is made to receive your grant, however if may take longer if employers or employee details do not match. Therefore, if you wish to receive your grant before the end of April, you should complete your application by 22nd April.
The grant will be paid into your UK bank account via BACS. You must pay the employee all the grant they receive for their gross pay – no fees can be charged from the money that is granted.
What is CJRS?
The CJRS is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020.
CJRS essentially allows employees to be temporarily laid off work for a minimum of three weeks and still retain an income. During this time the employee remains an employee of the firm but does not work.
However, employees can still take part in volunteer work or training as long as it does not provide services to or generate revenue for, or on behalf of the employer. This means that the army of volunteers who have courageously come forward in their hundreds of thousands in the NHS’ time of need will not suffer financially for doing so.
What businesses can apply for CJRS?
All businesses, charities and public authorities can apply. However, employer’s everyday work must have been ‘severely affected’ by Coronavirus. In addition, furloughed employees must have been on your payroll on or before 28 February 2020 to qualify.
Can my employee’s employment status effect my application for CJRS?
No, employers can apply for CJRS for full-time, part-time employees, for employees on agency contracts and for employees on flexible or zero hour contracts. All employees are included.
However, you may have to calculate their pay slightly differently for example:
If an employee has been employed for less than a year, you can claim for an average of their monthly earnings since they started work. Likewise, if the employee is paid a varied rate.
If an employer offers enhanced (earnings related) contractual pay to women on Maternity Leave, this is included as wage costs that they can claim through the scheme. The same principles apply where your employee qualifies for contractual adoption, paternity or shared parental pay.
If an employee is on sick leave or self-isolating, they should receive Statutory Sick Pay, but can be furloughed after this.
If an employee has more than one employer, they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.
What can I do if I’ve already made redundancies?
If you have recently made redundancies due to COVID19 you can rehire your employees and apply for the CJRS instead, however you must have made your employees redundant on or after 28th February 2020.
If redundancies are unavoidable due to the nature of your business, we strongly recommend you seek legal advice. Lloyd Clarke is able to provide you with a fixed fee settlement agreement service at £250 + VAT.
What rights do employees have if furloughed?
Employees that have been furloughed have the same rights as they did previously. This includes Statutory Sick Pay entitlement, maternity rights, other parental rights, rights against unfair dismissal and to redundancy payments.
Will I have to include CJRS payments in my tax returns?
Yes, payments received by a business must be included as income of the business and included in any taxable profits for Income Tax and Corporation Tax purposes. Businesses can also deduct employment costs as normal.
What additional support can I receive for my business?
You may be able to apply for a few different packages. If you pay VAT for example you can get this deferred, along with Income Tax payments. The government are also offering SME’s statutory sick pay relief, this is particularly important for key workers such as carers. You may be able to benefit from the HMRC Time To Pay Scheme allowing you extra time to pay any tax due or owed too.
For businesses in England who are operating in the retail, hospitality, leisure and nursery sector the government have offered you a 12-month business rates holiday. These businesses can also apply for a grant up to £25,000 if they have property with a rateable value between £15,000 and £51,000.
Can I apply for a business loan?
Now may actually be a good time to consider refinancing as the Bank of England has reduced the interest rate to 0.1% which is an historical low. Therefore, you may be able to receive more favourable rates for existing lending or new loans. If your loan is significant or secured, we recommend you seek legal advice.
Nick Attwell our commercial legal expert can offer you a fixed fee service which would be linked to the amount you wish to borrow. For a quote please call 01473 229242 or email Nick by clicking the link.
We would also recommend this if you wish to apply for the Coronavirus Business Interruption Loan as the loan amount can be up to £5m.
What help can I receive if I’m self-employed?
For self-employed people the government have offered a Self-Employment Income Support Scheme. If you are entitled to this the HMRC will contact you and invite you to apply online. The rules mirror that of the CJRS therefore you will need to work out your average monthly pay.
You can do this by adding together your yearly trading profits for the last three years and then dividing it by three.
However, this will not apply to personal service companies (people who are owner-managers of their companies, largely paid by dividends).
You may also be entitled to a Small Business Grant of up to £10,000. This is for businesses in receipt of small business rate relief or rural rate relief. Again, HRMC will contact you if you are entitled.
If you are struggling now however and cannot wait, you can apply for Universal Credits. This is simple to do if you have a laptop or tablet. But please be aware if you are married or living with a partner you may need to make a joint claim.
I would like more information about the CJRS or employment law?
If you or your business are affected in anyway by the Coronavirus or any other employment law issue, please contact Lloyd Clarke on 01206 239761 or email Lloyd by clicking on the link.