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Coronavirus Employee Retention Scheme

There has been a further update on Saturday to the guidance surrounding this scheme.

  1. Apprentices can be furloughed. They can continue to be trained whilst furloughed. If training then the apprentice must be paid at least the Apprenticeship Minimum Wage/NMW or NLW during the training period. The difference between the 80% of the wage and that must be met by the employer.
  2. If individuals employ a nanny and did so through the PAYE scheme and the nanny was on the payroll as at 28th February then that employee can be furloughed.
  3. Foreign nationals on the payroll as at 28th February can be furloughed.
  4. Employees on reduced hours or reduced pay are not eligible for the scheme.
  5. Vulnerable employees who are shielding in line with Public Health guidance can be furloughed if unable to work from home.
  6. Employees who have caring responsibilities and are unable to work can be furloughed.
  7. An employee with two jobs can be furloughed from one or both.
  8. Employees on fixed term contracts can be furloughed. You can extend or renew the contract and furlough.
  9. Office holders including directors, salaried members of LLP’s, agency workers including those who are in umbrella companies and those with deemed worker status can be furloughed.
  10. Re company directors it is important to officially confirm in writing that they can be furloughed but continue to carry out directorial duties to comply with the Companies Act.
  11. For salaried members of an LLP to be furloughed, the member’s agreement may need to be varied to reflect the fact that the member cannot work and the impact it will have upon their remuneration. For this scheme’s purpose the reference salary will be the member’s profit allocation excluding any amounts determined be the LLP’s member’s performance or that of the LLP Itself.
  12. When calculating the deemed salary for a furloughed employee you can include wages, past overtime, fees and compulsory commission payments. Discretionary bonuses, including tips, commission payments and non-cash payments must be excluded.
  13. The ‘salary’ should not include taxable benefits in kind or benefits through the salary sacrifice arrangements. Normally it is not easy to switch out of a salary sacrifice arrangement unless there is what is called a ‘life event’. Under these circumstances HMRC accept this is a ‘life event’ so a switch out can be done as long the employment contract is updated.
  14. National Minimum Wage only comes into play if an employee is working or treated as working under the NMW regulations. So if the furloughed employee is training during the furlough period then for that time they must be paid at least the NMW. Where the furlough payment is less than the NMW, the employer will need to make up the difference.
  15. To make a claim you will need:
    • ePAYE reference number
    • The number of employees to be furloughed
    • The claim period (start and end date)
    • The amount claimed (per the minimum length of furloughing of 3 weeks)
    • The business bank account number and sort code
    • The client contact name and telephone number
  16. The business calculates the claim with HMRC reserving the right to audit at a later date.
  17. The claim should be made either shortly before or during the running of the payroll. Retrospective claims can be made back to 1st March.
  18. An employee can be furloughed multiple times but each furlough period has to be a minimum of 3 weeks.
  19. If contractually allowed an employee can work for another employer whilst furloughed by your clients business. If taking on a furloughed individual a business should ensure that the individual completes Statement C on the starter checklist.

 

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