A word that has entered our vernacular for the first time for many of us is ‘furlough’. A few months ago this may not have been quite as familiar as it is now, and with 7 in 10 employers saying they have already used, or intend to use, the furlough scheme this is something which we will become ever-more familiar with. We have put together the key points of the government scheme, as well as included some useful links if you are considering making use of the scheme within your own business.
What is furlough leave and the Job Retention Scheme?
Essentially, it is the government initiative in order to avoid large swathes of employees from being made redundant during the current economic climate – it pays most of an employee’s wages whilst the employee is on furlough. The scheme will pay 80% of an employee’s usual wages, up to the value of £2,500 per employee per month. The scheme started from 1st March 2020 and is in place initially for a 4-month period.
Who can I furlough?
You can furlough any worker, including salaried directors, apprentices and zero hour workers as long as they were on your PAYE on 19th March 2020 or before. Each employee has to be furloughed for a minimum of three consecutive weeks, if you are going to claim the government grant.
How do I apply?
The Government have set up a HMRC portal so that you can apply for your furlough grant online – you will first need the details of the employees that will be entered into the scheme, as well as their earnings, so that the 80% value can be calculated and paid to you appropriately.
Can I rotate employees?
As long as an employee is furloughed for the three week period, they can then be rotated with another employee. An employee cannot do any work for you when they are on furlough.
Do I have to pay the wages before I claim back on the scheme?
In most cases the answer to this will be yes – the grant is intended to act as a reimbursement of wages that have been paid.
Useful Links and Guidance
See the Government guidance here.
Submit your claim here.
Apprentice arrangements during Covid – read here.
The self-employment Income Support scheme – read here.