OUR CORONAVIRUS RESPONSE
OUR CORONAVIRUS RESPONSE

THE CORONAVIRUS JOB RETENTION SCHEME

THE CORONAVIRUS JOB RETENTION SCHEME

Through The Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during the crisis. HMRC will reimburse 80% of designated furloughed workers wage costs, up to a cap of £2,500 per month. The scheme will initially run for three months from 1 March 2020. To access the Scheme you will need to:

• Designate affected employees as “furloughed workers” and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation

• Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details shortly).

While it has been clarified that the employer is not obliged to top up the government payment, it is not clear if the 80% contribution will cover employer NI or pension contributions. If the employer still has to bear these costs, it may not be a viable option for those who are seriously financially distressed. The announcement was clear that this will not override employment law protections.

For those employers for whom the scheme isn’t sufficient to prevent job losses, a reminder that the Insolvency Service’s redundancy Payments Scheme operates the Financial Difficulty Scheme. This was set up to provide assistance to employers in making statutory redundancy payments while at the same time avoiding additional job losses if the employer became insolvent.

More details about making staff redundant can be found here.

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    Robin Berry – Morgan Management
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    Andy McCarron, McCarron and Co
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    Qadeer Ahmed, MD, ABA Finance
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    Edward Finch, group MD, MRIB insurance brokers
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    Frank Wessely, Partner, Quantuma LLP
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    Karl Austen, MD, Surefoot Communications
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    Adam Fawsitt, Director, FHT Limited
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    Edward Finch, group MD, MRIB insurance brokers
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