We hope you are keeping as well as possible in this uncertain time. We know that one of the main concern for employer’s is how you are going to support employee’s while your business is closed/partially closed. So far we have the following information regarding furloughing employee’s which will hopefully answer a few of your questions –
- Employee costs from 1st March can be reclaimed by employers’ depending on the date the employee was furloughed.
- You will be able to reclaim 80% of employees’ wages capped at max of £2,500, plus employer’s NI plus employer’s pension costs.
- The employee is not allowed to work during the period being furloughed.
- A employee must be furloughed for a minimum of 3 weeks.
- It should be communicated to the employee they are being furloughed (ideally in writing).
- If someone was on Statutory Sick Pay (SSP) / self-isolated because of symptoms, they can be furloughed after the SSP period.
- If an employee is shielding in line with public health advice they can be furloughed.
- If an employee has multiple jobs, this is OK they can be furloughed from multiple jobs.
- Statutory Maternity Pay (SMP) applies as normal.
- The employer / payroll bureau to calculate the gross, ER’s NI and pension cost of the furloughed employee for the claim.
- An employer can choose to pay up to 100% of normal salary if they would like but they do not have to.
- Salary / rate of pay which can be claimed is that as was paid in the February 2020 payroll.
- Commission nor bonus can be included in the calculations.
- If a employees pay varies then you use this month from last year or the average of the 2019/20 tax year earnings.
- Claims will be made via an online service likely to be available at the end of April.
- Info needed for claim:
- your ePAYE reference number
- the number of employees being furloughed
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 weeks)
- your bank account number and sort code
- your contact name
- your phone number
- One claim can be made every 3 weeks.
- The amount will be paid by HMRC into the bank account given for the employer.
- At the end of the scheme employees will either return to work or be made redundant (in line with normal redundancy procedures).
- The money received from the government will be included in the company accounts as income and will be taxable.
If you are a director of a Limited Company and receive a salary through the payroll you can be classed as a furlough employee if you are unable to work (as long as you are only completing statutory obligation requirements), please note that dividends are not included in this calculation.
If you have any queries regarding the above then please get in contact.
Please note that the rules and regulation are ever changing and above is our understanding at present. We will send on more information in the future once we have received more guidance from HMRC about the portal.