Under the Coronavirus Job Retention Scheme, all UK employers will be able to access financial support to continue paying part of their employees’ salaries for those employees who would otherwise have been laid off or made redundant during the coronavirus pandemic. The Government intends that the scheme will run for at least 3 months from 1 March 2020, but it may be extended if necessary.

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. This is broadly median national salary. Employers can choose to fund the difference between this amount and an employee’s full salary, but there is no need to do so.

All UK businesses will be eligible to participate in the scheme. This includes not only limited companies but also LLPs, partnerships and charities.

Employers will need to:

1. Designate affected employees as ‘furloughed workers’, and notify  employees of this change. Changing the status of employees remains subject to existing employment law. This means an employer will need to agree with an employee that they’re going to become a furloughed worker and also decide upon the appropriate pay. It’s likely employees will agree to this if the alternatives are being made redundant or being sent home without pay.

2. Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal.  HMRC is working urgently to set up a system for reimbursement as its existing systems are not set up to facilitate payments to employers. When the portal is set up, HMRC will set out further details on the information required.

Employees should not undertake any work for their employer while on furlough. The employee will still be eligible for additional forms of support, including Universal Credit.

We’ll update this page as further details about the scheme become available.

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