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Coronavirus Job Retention Scheme- Frequently asked questions.


HMRC announced last week that they would help all employers by offering to cover 80% of employee’s wages. It is unlikely that the scheme will be in full operation until late April, but questions have been mounting about how the scheme will work. Below are questions that we have seen over the last few days. We are still waiting for further information from the government, and will be sure to update you as soon as there are further announcements.


  1. How does the scheme work?

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.


  1. How do I do this?

You will need to:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)


  1. What is a ‘furloughed’ worker’?

A furloughed employee is someone who is kept on the payroll during a period where the employer does not have any work for the employee. This is rather than the employee being made redundant.


  1. Can a furloughed worker still work?

No, the employee will remain employed while furloughed. However, to qualify for the scheme they must not undertake any work for the employer while furloughed.


  1. If I furlough a worker, can I bring them back into work?

Yes, once you decide you have enough work for the employee you can cancel furlough leave and bring them back into work.


  1. How can I claim the 80% contribution?

HMRC are urgently working to set up a system for reimbursement. As soon as this is announced we will update you as quickly as possible.


  1. Do I have to pay the 20% balance of my employee’s wages?

No, you can pay 80% of you employee’s wages up to £2,500 a month once they have been furloughed, and you will then be able to claim this back retrospectively.


  1. What happens with tax and national insurance?

We still have not had confirmation, but it is likely that the 80% wage will have tax and national insurance deducted in the usual manner.


  1. Can I pay my employees more than the 80% if I would like to?

Yes, but you will only be able to claim for 80% of £3,125 (which totals the maximum of £2,500).


  1. What about employer’s national insurance, will I have to pay that?

This hasn’t been decided yet, we will update you as soon as this has been announced.


  1. I am struggling with cash flow, how can I pay staff this month?

There is help available. You can book a video conference call with one us at LHP to discuss your personal situation, and we can go through an action plan with you and discuss the funding available. Click here to book on.


We have been using LHP as our business and tax advisors since 2014. As well as the standard accounts and VAT returns that they prepare on our behalf, we really appreciate their pro active and hands on approach in providing professional advice via telephone calls, seminars and their monthly newsletters. We would highly recommend their services.
Robert Davies - Penfro Consultancy
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