If you are considering laying off staff due to little or no work then wait…
The government have introduced a new measure called the Coronavirus Job Retention Scheme where you will get government support
Under the Coronavirus Job Retention Scheme, all UK employers with a PAYE scheme that was created and started on or before 28 February 2020, will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis. This applies to employees who have been asked to stop working, but who are being kept on the payroll, otherwise described as ‘furloughed workers’.
HMRC will pay employers a grant worth 80% of an employee’s usual wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. This is to safeguard workers from being made redundant. The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st if applicable and is initially open for 3 months, but will be extended if necessary.
All UK-wide employers with a PAYE scheme that was created and started on or before 28 February 2020 will be eligible including:
The employer must have a UK bank account.
You will need to:
HMRC are working urgently to set up a system to pay these grants. We expect the first grants to be paid within weeks, and we’re aiming to get it done before the end of April. If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.
HMRC are suggesting the directors who pay themselves mainly via dividends should follow this scheme. Our advice at this stage is that in order for a director to be furloughed they must not undertake chargeable work, marketing or active promotion of the company. Their duties should be limited to basic admin duties only. This will however only give you funding for 80% of your salary only. Your dividend income will not count.