Coronavirus Job Retention Scheme
The CJRS was announced by the Government on Friday 20 March 2020, following the instructions that all bars, pubs, clubs, gyms, theatres and restaurants (other than takeaway services) should close “as soon as they reasonably can” and in any event, from Friday night.
The latest government advice regarding the CJRS can be found here: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
How to access the Coronavirus Job Retention Scheme (CJRS)
The CJRS was announced by the Government on Friday 20 March 2020. Through the scheme HMRC will reimburse employers 80% of the wage costs of a furloughed worker.
Gaining access to the scheme quickly will be essential for any business wanting to survive.
We’re already working with clients to identify prudent measures they can be taking, including any key documentation in order to be eligible for the scheme.
To ensure they can act quickly we’re offering a fixed-fee service to advise businesses as to their specific circumstances, including a review of any relevant contractual terms and then preparing the relevant letters for issuing to employees.
We understand the importance of this scheme for the continued trading of many businesses and we’re advising our clients not to delay or to risk their eligibility.
- Consideration of contractual terms
- Advice on options available
- Letter template to send to staff
- Announcement script (if required)
This service is available from £750-£1000 (+VAT)
To start now, get in touch:
What is the Coronavirus Job Retention Scheme (CJRS)?
The CJRS is a Government scheme whereby employers, who would have been forced to lay off workers as a result of the Coronavirus, will be able to ‘furlough’ workers during the affected period. The employer will then be able to access support from the government through a government grant which will assist the employer in paying the workers during the period in which they are furloughed. Payments will be backdated to 01 March 2020 if required, and can cover affected workers who were employed on or before 19 March 2020 and continue to be employed. The government has initially stated that the CJRS will run for a period of 3 months from 01 March 2020, however has stated that it will be extended if necessary.
HMRC will reimburse employers 80% of the wage costs of a furloughed worker, up to £2,500 per month. It is presently unclear whether the £2,500 cap refers to gross or net pay. When announcing this policy, the Chancellor of the Exchequer, Rishi Sunak, referred to the grant being just above the median income in the UK. The median income in the UK is just shy of £2,500 per month pre-tax and, as such, it would seem that his reference to the median income would indicate that it will only cover workers paid up to £2,500 per month pre-tax (£30,000 per annum), however the government have not confirmed this.
The employer will have the option to ‘top up’ the payments, so that the worker does not lose out on pay.
How can an employer access the CJRS?
All UK businesses are eligible to access the CJRS.
An employer will need to designate the affected employees as ‘furloughed workers’, and will need to notify the employee of this change in status. This will have to be agreed with the employee, and in the absence of such the employer will have to consider making employees redundant. It does seem highly unlikely that an employee would refuse to be furloughed and receive 80% of their salary (up to the cap), where the alternative is to remain at home and be paid nothing, or face redundancy. The impact of the coronavirus on businesses, may of course lead to further problems, with employers potentially being unable to make redundancy payments to those employees who have not agreed to be furloughed.
Once the employer has agreed the change in status with the employee, the employer will need to submit relevant information to HMRC regarding the details of furloughed workers, and their earning. Further information may be required, however this has not yet been set out by HMRC, although they are expected to provide more detail in due course.
This information will need to be submitted through an online portal, which has yet to be set up, however initial government estimates suggest that this will be by no later than the end of April 2020. If businesses are experiencing short term cash flow issues, then they are advised to consider their eligibility for the Coronavirus Business Interruption Loan, and the VAT deferral announced by the government.