Questions on the 80% HMRC grant for furloughed employees
The Chancellor announced on Friday 20 March 2020 that any employees being furloughed (temporarily laid off) would be paid 80% of their wage, under a new Job Retention Scheme, so here’s what we know so far.
Please check out our main Stay Positive COVID19 page for other info.
We also have a specific page for employees and the self-employed
How will the 80% be paid?
The employer will make a claim to HMRC.
We are waiting for more info on this, as HMRC are building a new online portal.
How much will be paid?
The amount paid will be the lower of 80% of the employees wage, or £2,500 per month,
The employer will also be able to claim the employer’s national insurance and employer’s pension contribution on the 80% pay.
What do you need to do as employer?
You must identify your furloughed workers now.
You must let your furloughed workers (once we know more, we will provide a template for you)
This will be subject to your normal employment contracts, so do seek HR advice.
You must give HMRC a list of these furloughed workers and their pay, via the new online portal.
HMRC are setting up a new portal to manage this.
When will the grant be paid from?
HMRC are setting up a new portal to manage the grant applications and payments.
Payments will be backdated to 1 March 2020, or the date that your employee was furloughed.
If you’ve already made someone redundant, they should be re-instated in order to receive the 80% grant.
Can employers top up the remaining 20%
Yes you can, but you don’t have to.
Do employers still need to make pension contributions
Yes if it’s a definited benefit scheme, contributions are currently still due.
These will be covered by the 80% grant.
What about directors of limited companies?
If you are only carrying out your statutory duties as director of the company, you can be furloughed.
More info on director’s statutory duties here.
Dividends are not covered by the new furlough grant for employees, only PAYE salaries.
If my employee is self-isolating, will we get the 80% grant?
At the moment, your employee will get statutory sick pay (SSP) from day 1 instead of day 4.
When their self isolation ends, you can furlough them.
Do I still need to pay PAYE and NIC?
Yes you do, but use HMRC’s new Time to Pay number to delay or spread your payments: 0800 0159 559
My employee has only recently started, will we get the 80% grant?
The employee has to be on the payroll at 28 February 2020.
If they started after that, please ask them to apply for universal credit.
Questions we don’t know the answer to yet:
If my employees are working from home, will we get the 80% grant?
If my employees could work from home, but can’t as they are looking after their children, will we get the 80% grant?
My employee goes back to college in September, do I have to pay them until that date?
Do we have to prove we need financial support?
Please keep popping back for updates
We are expecting more detail imminently, and will update this page. So please bookmark it!
We are not employment law experts
For specific advice re: contracts, employee rights etc please contact your HR advisor, or solicitor.
We always recommend Sandy Green at the HR Dept, but bear in mind that she will be inundated at the moment, so be patient!
What else do I need to know?
- Check out our main COVID-19 blog Stay Positive.
- Please also join our private Facebook page for small businesses
- Sign up for our Weekly Webinars.
- Sign up for our regular Newsletters.
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