The Chancellor of the Exchequer has announced the Coronavirus Job Retention Scheme to prevent workers losing their jobs as result of the spread of the Coronavirus. The Government intends to keep workers employed even if the economic slowdown that results from measures taken to combat the Coronavirus result in companies losing money.
The Coronavirus Job Retention Scheme can be applied for by employers on behalf of employees. The employers will need to make a grant application for each employee.
The Chancellor has stated that any employer in the country – small or large, charitable or non-profit – will be eligible for the scheme.
- 80% of employee’s wages to be paid (up to a maximum of £2,500 per month).
- Payments will be backdated to 1 March 2020, and will be made, initially, for a period of 3 months.
- Self Assessment income tax payments due in July 2020 will be deferred until January 2021.
- VAT payments due between March and June will also be deferred. No VAT registered businesses will need to make a payment between now and then.
- From 6 April Universal Credit and Tax Credits will be increased by £20 per week.
- The recently launched Coronavirus Business Interruption Scheme will be interest free for 12 months.
- Also from April the Local Allowance Housing rates will pay for at least 30% of market rents in each area. Housing Benefit and
- Universal Credit increases will also support the housing market.
How to Access the Coronavirus Job Retention Scheme
- The employer needs to designate employees as ‘furloughed workers’, and the employees must be informed of this change.
- Information will need to be submitted to HMRC through a new website portal, giving details of the employees and their earnings.
- HMRC will then reimburse the employees with up 80% of their wages (to a maximum of £2,500 per person per month).
- HMRC are setting up this system now, as a current one does not exist to perform this role.