At ABM Accountant Reading many client’s are asking us information about the employers grant. Additionally, how do I furlough staff ? A question clients ask us on a daily basis. This is the latest update as of 7th April 2020
Employers Grant – Job Retention Scheme
Basically all employers will be able to claim a grant from HMRC amounting to:-
- 80% of the gross cost of wages
- employers National Insurance Contributions and
- Automatic Pension Enrollment obligations
The Job Retention scheme is available for all employees who are furloughed due to the Coronavirus pandemic.
The scheme will backdate to 1st March 2020. It is initially planned that it will be paid for a three-month period. A period extension is likely.
This scheme is designed for employers to retain employees.
Any payroll scheme not operating before the 28th February 2020 however will not be eligible for this grant.
Whilst on furlough staff must not undertake work on behalf of their employers. This includes the provision of services or generating income.
Furthermore furloughed workers may undertake training, at the request of their employer. Providing this training does not result in the provision of a service or generate income for the employer.
ABM Accountant Reading – Process to claim Employers Grant
To be eligible, the employer must write to each employee confirming that they have been furloughed.
Moreover you must retain copies of this communication for a minimum of five years.
Indeed you do not all have to furlough all employees. In addition, employees working either on reduced hours or reduced pay they WILL NOT be eligible.
An employee self-isolating however will be entitled to SSP (statutory sick pay)
Company Directors Furlough
Company directors may be furloughed. However, during this time, they must not undertake any commercial activity on behalf of the company.
They may, for instance, undertake their directors responsibilities in order to comply with The Companies Act 2006
Agency Workers Furlough
Agency workers and employees of umbrella companies may be furloughed. Accordingly, this will be by agreement with their agency. In conclusion, the agency will be deemed as their employer.
ABM Accountant Reading – How to claim Employers Grant
In conclusion, to claim you will need the following information:
- PAYE reference number
- Number of employees furloughed
- The Claim period, start and finish dat3es
- Amount claimed
- Bank account number and sort code
- Contact name
- Phone number
The Inland Revenue are reserving the right to audit claims at any time in the future. Therefore, you will need to treat grants as taxable income in accounts.
HMRC expect to have completed the portal necessary for employers to make their claim by the end of April.
Similarly, we will update you with further information, as soon as it is available.
For information about the Self Employed please read our previous blog.
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