The Coronavirus Job Retention Scheme is available to businesses that stopped working due to the lockdown or from the loss of business.
From Monday, (20 April) business owners who have decided to furlough staff will be able to make claims under the scheme.
And in the past day, the government has released more information about how it will work. They have also announced some revisions.
There will no doubt be a surge in demand as business owners head to the HMRC website. So be prepared to avoid delays to your application.
Coronavirus Job Retention Scheme changes
The scheme is for businesses losing work or closing due to the coronavirus pandemic.
Rather than make employees redundant they can furlough those workers until they can return to work, although the scheme is initially for only 3 months.
When originally announced, business owners could only claim for those employees who were working for them up to and on 28 February 2020. This led to some workers missing out because they were caught between jobs.
So the government this week announced that those who were employed on or before 19 March 2020 will be eligible for the scheme.
Businesses can pay these employees and then claim 80% of their wages from the government, up to a total of £2,500 a month.
It is up to each business owner or directors to decide whether they only pay the 80% they can claim back or pay the extra 20% so employees don’t lose anything.
How to make a claim
HMRC has published details of the job retention scheme in the past couple of days. It launches on Monday and you will not be able to prepare a claim before that date.
In fact, the website hasn’t been updated so there is nothing you can do until then. But on Monday you will be able to use the website for claims.
You can only claim online and only business owners can claim, not your accountant. The service also calculates the amount you can claim.
What will I need?
Before making a claim make sure you must:
- Have a Government Gateway ID and password – if not then register on the HMRC website.
- Be enrolled for PAYE online – if not, visit the PAYE page on the HMRC website.
- Have the following information for each employee – name, National Insurance number, claim period and amount, PAYE/employee number
Ask your ‘agent’ (usually your accountant) to claim if they are authorised to act on PAYE matters.
If you are a Concept Accountancy client, then contact us if you need help or want us to make your claim.
You need to inform us about which UK bank account the grant should be paid into. And make sure you keep records and calculations for your claim.
Many questions on the Coronavirus Job Retention Scheme and other measures are answered on our recent FAQs blog.
Self-Employment Income Support Scheme
Guidance has also recently been updated regarding the Self-Employment Income Support Scheme.
As with the Job Retention Scheme, this is for the self-employed who lost work as a result of the pandemic. Like furloughed employees, you will be paid 80% of your average turnover in a lump sum in June.
HMRC says it will use figures from your past 3 years (or up to if started your business within 3 years) tax returns for your total trading income, or turnover. They will then deduct allowable business expenses and capital expenditure.
That figure will be used to work out your average turnover. A full range of examples has been drawn up by HMRC here.