SME: SOS is a free resource to empower small businesses with the latest information & help available to them, and lots of you have been in touch asking me about the furlough scheme! So, I’ve created this handy guide to give you an overview of everything you need to know!
The Coronavirus Job Retention scheme allows employers to put staff who can’t work because of coronavirus on ‘furlough’ – or ‘on hold’ – and the Government will cover 80% of their salary, up to £2,500 per month, for at least 3 months starting from 1 March 2020.
Think of this like pressing pause on your team’s jobs during the crisis, when you might not have a need for them, and then when it’s over you press play and they’re ready to get back to work and kickstart the economy!
You can furlough someone if:
- You have no work for them to do
- They are looking after children
- They are self-isolating
Who is eligible?
- Furloughed employees must have been on your PAYE payroll on 28 February 2020.
- They can be on any type of contract, including employees that are: full-time, part-time employees, on agency contracts, on flexible or zero-hour contracts.
- Sole-employee limited company directors, who pay themselves a small salary by PAYE & top that up with dividends can furlough themselves but there is no support for dividends.
How to apply?
- Discuss with your staff & make any changes to their employment contract by agreement.
- Write to your employee confirming furlough & keep a record of this communication.
- Calculate the amount you are claiming – HMRC will retain the right to retrospectively audit all aspects of your claim.
- The online service for claiming is NOT yet available – hopefully it will be by end of April 2020 but use this time to get prepared.
Some need to knows:
- The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.
- When on furlough, an employee can not do any work for you.
- Employees hired after 28 February 2020 cannot be furloughed or claimed for in accordance with this scheme.
I want to stress that the Government is not trying to catch you out with this! They want to stand by businesses, who stand by their employees & understand they’ll be lots of reasons why people can’t work at the moment.