On Friday 20/03/2020, The Chancellor made the historic announcement that the UK government was to step in and help to pay the wages and salaries of retained workers up to a maximum of £2,500 a month. This announcement placed the responsibility on HMRC to fund 80% of wages for furloughed staff.
The Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme has been set up to allow employers to contact HMRC for grants to cover most of the wages of staff who are not working but are furloughed and kept on the payroll instead of being laid off. The scheme will be backdated to 1 March 2020 and is intended to last for 3 months, initially, after which it will be reviewed.
How will HMRC fund 80% of wages for furloughed staff?
HMRC is currently working on the mechanism for reimbursing employers directly into their bank accounts.
In the meantime, employers need to:
- designate affected employees as ‘furloughed workers’ and notify them of this change
- submit information to HMRC about the employees that have been furloughed and their earnings through a dedicated HMRC portal
- HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month
Canalitix Accountants would welcome the opportunity to act as your agent in relation to HMRC taxes. Once authorised by HMRC, we will manage the Coronavirus Job Retention Scheme application process on your behalf.