The Chancellor announced on Friday that government grants will cover 80% of the salary of PAYE employees who are furloughed (temporarily laid off) due to the virus. The scheme will run to 31 October and will change after 31 July with employers bearing more of the costs.
What do I need to do as an employer?
- Identify your furloughed workers.
- You must notify your furloughed workers that they have been designated as such. This will be subject to your normal employment contracts so you should seek HR advice.
- You will have to provide details of those furloughed workers to HMRC and their pay via a new portal.
- Furloughed workers cannot undertake any work during this period.
How do I make a claim? (update 8.04.20)
The portal will be available from 20 March.
To make the claim you will need:
- your employer PAYE reference number
- the number of employees being furloughed
- National Insurance Numbers for the employees you want to furlough
- Names of the employees you want to furlough
- Payroll/works number for the employees you want to furlough
- your Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
- your bank account number and sort code
- your contact name
- your phone number
Do I have to pay the extra 20%
You can top up the pay for the extra 20% but you do not have to.
Do I still need to pay PAYE?
Yes you do, but if you are having difficulty paying use HMRC's new Time to Pay number (0800 0159 559) to spread the payments.
Do I still need to pay auto-enrolment pension contributions
Yes you do, but the 80% grant includes the pension contributions.
Please remember that we are not employment law experts and you should take advice from you HR advisers in relation to your employment contracts.
We will be updating this post as more information becomes available.
Stay positive, we are in this together.
The full HMRC guidance can be found here.