Information for Employers

Who Can Claim?

Employers running PAYE scheme can claim money through Coronovirus Job Retention Sheme. Any organisation that meet criteria below is eligible:

You must be registered for PAYE on or before 19th March 2020;
You must be enrolled for PAYE Online with HMRC;
You must have a UK bank account in the name of your business.

What Can You Claim?

This is a Job Renetion Scheme. You can only claim money if your business is suffering from coronavirus (COVID-19). Amount you claim is up to 80% of wages of employees you send on furlough leave.

£2500 is the most you can claim per employee

  • For example, if an employee earns £2000 per month on average, government will cover 80% of this amount, i.e. £1600.
  • However if an employee earns £3500 per month on average, government will cover only £2500.

On top of this, you can claim Employer National Insurance associated with wages on the amount you claim and pension contributions up to the level of the minimum automatic enrolment employer pension contribution. That provides adds +13.8% to cover National Insurance and +3% to cover Pension Autoenrollment payment.

Furlough Leave

What is furlough leave? It is a special type of leave when an employee doesn’t do any work for the employer for a period of time very similar to annual leave or maternity leave. To be eligible, furlought leave must be for 3 weeks at least and must not be interrupted.

A typical employment contract would not have provision for furlough leave. As such it is mandatory to negotiate an alteration to terms of employment with your staff. An employee doesn’t need to agree to such changes.

Government is offering up to 80% of average salary as a grant. You may still be required to pay employee salary in full. This is for you to negotiate with employees you going on furlough leave.

If an employee is on maternity leave or sick leave already, you may not be able to send them on furlough leave. Seek professional advice in such circumstances.

Some Examples

Limited Companies with PAYE

A limited company that runs PAYE is eligible to claim support through Coronavirus Job Retention Scheme if it sends employees on furlough leave.

This includes Company Directors that receive salary / wages for their service.

Limited Companies without PAYE

If your company doesn’t run PAYE it means it doesn’t employ any staff. As such you are not eligible to benefit from Coronavirus Job Retention Scheme.

Government is yet introduce some support for people running such micro-businesses.

Self-Employed Business People

Self-Employed don’t normally have a PAYE scheme. Instead they pay taxes through Self-Assessment. Government has introduced a separate support scheme for self-employed.

Individuals

If you employ household staff and you meet criteria about running PAYE and sending information about employee pay through HMRC real-time interface (RTI), you can claim support through Coronavirus Job Retention Scheme. However your staff must be send on furlough leave for you to be eligible.

Taxation

Any grants you receive through Coronavirus Job Retention Sheme increase your business revenue. In some cases it may mean that you will be have to pay Corporation Tax on money you receive from the government.

Any salary or wages you pay to employees on furlough leave are considered personal income and are subject to usual income tax and other deductions.

Maillist

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