Following the announcement of the Corona Job Retention Scheme by the Government on Friday 20th March 2020 we present our current (as of 21st March 2020) understanding of the Scheme to try to assist you to understand what it might mean for your business.

We caution that detailed guidance has not yet been published by the Government and there remain a number of uncertainties in relation to the announcement. We would caution the reader accordingly to await more detailed information from Government that will follow in the next few days before implementing any plans.

1. What Is It?

The Chancellor has introduced the Coronavirus Job Retention Scheme, a new Government plan designed to support employer‘s to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.

This means workers in any part of the UK can retain their job, even if their employer cannot afford to pay them and be paid at least 80% of their salary.

The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st and will be open initially for at least three months – and the Chancellor announced that it would extend for longer if necessary.

The Chancellor indicated that HMRC are working night and day to get the scheme up and running and it is expected that the first grants will be paid within weeks – with the aim being to get the Scheme fully functional before the end of April.

2. How Does The Scheme Support Employers?

Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are furloughed and kept on payroll, rather than being laid off.

HMRC have announced that they will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. Employers can top up salaries further if they choose to.

HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers yet.

3. What Is a Furloughed Worker?

The definition of a furlough is to allow or to force someone to be absent temporarily from work.

Being classified as a Furloughed Worker means that the employee is kept on the employer’s payroll, rather than being laid off. The employee should not undertake work for you while they are furloughed.

4. Am I Eligible?

All UK employers will be able to access support to continue paying part of their employees’ salary for those designated Furloughed Employees that would otherwise have been laid off during this crisis.

5. How Do I Access the Scheme?

You will need to:

6. So What Can I Do To Prepare To Make My Claim?

Like many announcements from Government, you will not be able to immediately make your claim, there is still much to be undertaken by HMRC to develop:

This is likely to take some time, and certainly, the Government has announced that payments are unlikely to arise within the next few weeks, and so we are recommending that in the interim you commence your planning and assessment of who is / might be proposed to be a Furloughed Employee by you.

Remember full particulars are yet to be clarified and any actions that you take may pre-empt the actual legislation that will be implemented in due course. Based upon the interim announcements made to date it would appear:

7. Are There Any Issues That Need Clarification?

Before you make any binding announcements or decisions, there remains a lot to be clarified by Government for you to be confident of the implications of any decision that you make immediately and how such decisions may impact upon the Grant that you may be eligible for, and the wider cost implications that could materialise once the legislation is clarified. Proceed with caution before finalising your plans (await further announcements and clarifications ideally) and in the interim consider:

8. Barrons Immediate Thoughts

The Government has moved swiftly to try to make an announcement that provides comfort to all employers, this has to be applauded.

9. Do You Intend Seeking Assistance?

Barrons have moved swiftly to focus upon the immediate needs of our clients, and future clients, to facilitate the availability of a range of support services in these critical times:

Please do not leave contact to the last minute – early support and advice is always to be recommended; and given the expected increase in demand for the services we offer we anticipate that however hard we try, we will not be able to meet everyone’s desired turnaround times as the cash pressures created from falling demand and increasing debtor collection issues materialise.

If you wish to start preparing to maximise the speed by which we can facilitate and support you to make a Coronovirus Business Interruption Loan (CBIL) application, please make urgent contact with Jason Michelow (jasonm@barrons-bds.com) who will commence advising how we can assist you maximise the quality of your application.