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
**BREAKING: 12 May 2020 Furlough will be extended to end of October 2020**
Employers will be asked to share the cost from August 2020
Furlough will be more flexible, for example workers can be furloughed part-time
Check out our 29 May 2020 blog on the changes to furlough and self-employment grant
Update – HMRC Portal is now live 20 April 2020
All you need to do now is:
Make sure you can access your tax account via HMRC’s Government Gateway, and that you can see your PAYE account.
Watch Sharon’s step by step video on how to make a claim.
Have the following info ready:
- The bank account number and sort code you’d like HMRC to use when they pay your claim.
- The name and phone number of the person in your business for HMRC to call with any questions.
- Your Self-Assessment UTR (Unique Tax Reference), Company UTR or CRN (Company Registration Number).
- The name, employee number and National Insurance number for each of your furloughed employees.
- The total amount being claimed for all employees and the total furlough period.
If we process your payroll:
We can access the new HMRC Portal on your behalf, and will submit your claim.
Please complete our online form to tell us about your furloughed employees, so that we can make the claim for you.
If you’re our client, but process your own payroll:
We are making sure that we have full HMRC authority for your PAYE account, incase you need our support to make a claim.
Make sure you check out the new guidance from HMRC here on:
If you’re not our client, but would like to be!
Please get in touch with me.
How will the 80% be paid?
The employer will make a claim to HMRC.
HMRC are building a new online portal, which should be live 20 April 2020.
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.
The amount will be calculated based on your employees’ February 2020 pay if they have a set salary, or an average of the previous 12 months if their pay varies.
If your employee has worked less than 12 months, it will be an average of the months they’ve worked.
What do you need to do as employer?
You must identify your furloughed workers now.
You must let your furloughed workers know (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.
However, if you have employees who are undertaking training while on furlough, you should make sure that they are paid at least the apprentice wage, national minimum wage, or national living wage, as appropriate.
Do employers still need to make pension contributions?
Yes if it’s a defined 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.
New guidance states that you can also furlough employees on sick pay, self-isolating or shielding.
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 and have pay filed with HMRC (via RTI) on or before 19 March 2020.
If they started after that, please ask them to apply for universal credit.
Who else can be furloughed?
If your employees could work from home, but can’t as they are looking after their children, they can be furloughed.
If your employee is self-isolating or shielding, or caring for somebody in this situation, they can now be furloughed.
What happens with holiday pay?
Statutory holiday pay will still accrue. This is the usual 20 days, plus 8 bank holidays (pro-rated if your employee is part-time)
If your employee takes holiday, or usually has bank holidays off, these should be paid at their normal full pay (not the 80%)
Alternatively, you can ignore holiday and bank holidays, and carry them over to be used once we’re all back at work.
Questions we don’t know the answer to yet:
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 Support page
- Please also join our private Facebook page for small businesses
- Sign up for our Weekly Webinars
- Sign up for our regular Newsletters
We’re here for you.
Please get in touch on any of the above, or if you’d just like a chat, or call the office on 01432 273400.
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Please find and book a slot here.
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Stay Strong. Stay Safe. We can do this!