The document provides information about the UK government's COVID-19 Job Retention Scheme, which provides grants to employers to pay employees who are furloughed. Key details include: employers can claim 80% of wages up to £2,500 per month for furloughed employees; directors, agency workers, and employees hired before February 28 are eligible; and employers must discuss furloughing with employees and keep records of agreements. Employers can claim reimbursement for wages, National Insurance contributions, and pension contributions through an online portal opening in mid-April.

1. COVID-19 Job retention scheme
Government grants for Employers to furlough employees
PJCO Chartered Certified Accountants 2/4/2020 Update

2. Where is the Government Guidance on this?
https://www.gov.uk/guidance/claim-for-wage-costs-through-the-
coronavirus-job-retention-scheme
This is guidance not legislation so it could change in the coming days or
weeks.
(Note I have heard of one larger employer that is not furloughing staff
until this becomes legislation)

3. Who can claim the subsidy?
It’s the Employer that claims not the employee.
Any UK organisation with employees can apply, including:
•Businesses
•Charities
•Recruitment agencies (agency workers paid through PAYE)
You must have created and started a PAYE payroll scheme on or before 28 February 2020
and have a UK bank account.

4. Are all employees eligible?
The Job retention scheme is applicable to:
Full-time employees
Part-time employees
Employees on agency contracts
Employees on flexible or zero-hour contracts
The scheme also covers employees who were made redundant since 28 February 2020, if they are
rehired by their employer.

5. Are all employees eligible?
They must be on your PAYE payroll:
On 28th February 2020
And must be “furloughed” after 1st March 2020
So no claims for employees taken on in March 2020 unfortunately, but
maybe this will change…

6. What does “Furloughed" mean?
“Furloughed” employees only
Furloughed means “putting employees on temporary leave but retaining them under their employment
contract”.
To receive the subsidy, when on furlough, an employee cannot undertake work for or on behalf of the
organisation. This includes providing services or generating revenue.
If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme
An employment contract could be written or verbal, we would suggest written contracts and have HR consultants that can offer 6 months HR advice for around £250. Let us know if
you want details.

7. Can directors be furloughed?
Yes, but they must not carry out any services or fee paying work except for their statutory
duties as a director. The subsidy is based only on the PAYE salary not Dividends !
Confirmed by Ben Kerry, HMT.
"With respect to Directors and owner managers, that does not disqualify them from being furloughed so long as they are on PAYE
payroll. I understand that they will have some statutory duties and obligations such as filling up their accounts and they will still be
allowed to undertake those statutory duties whilst they are being furloughed so that would not count as doing work. So one of the key
conditions of the furlough scheme is that the employee is not allowed to work for the employer but if you are the owner-manager and
you do have statutory duties then you can continued to undertake those duties while being on furlough".
Ben Kerry, Head of Labour Markets, HM treasury.
Quoted from CBI.org.uk, “Daily Coronavirus webinar”, 27th March 2020

8. Director/ Shareholder petitions
There are many petitions going about looking for help of the owner/
shareholders of small businesses as they do not look like they are being
looked after by the various grants or subsidies on offer.
Self employed get up to £2,500 per month, your employees can get the
same but director may just get £576 or £832

9. What do I need to do to Furlough my
employees ?
Talk to your employees about furloughing as it involves making a change to the employment contract by agreement.
There are 3 options:
(a) retain and carry on working,- No Subsidy
(b) lay off, - subject to notice or redundancy, equality and discrimination laws will apply in the usual way.
(c) Furlough – need a written agreement – You can use our template free of charge but remember we are not
lawyers or specialist HR consultants !
HMRC state “To be eligible for the subsidy employers should write to their employee confirming that they have
been furloughed and keep a record of this communication”.

10. How do I remain cost neutral?
Offer to furlough staff on 80% of their normal regular gross pay up to a
maximum of £2,500 gross. – Use February 2020 regular gross pay as a
base.
Fees, commission and bonuses should not be included.
You can offer more but it will involve a cost to the business.

11. Basic salary staff – Full Time or
Part Time
For full time and part time salaried employees, the employee’s actual
salary before tax, as of 28 February 2020 should be used to calculate the
80%. Fees, commission and bonuses should not be included.
That’s easy but what about variable pay?

12. How to calculate employees whose pay
varies
If the employee has been employed (or engaged by an employment business) for a full twelve months prior to
the claim, you can offer and claim for the higher of either:
a) the same month’s earning from the previous year
b) average monthly earnings from the 2019-20 tax year
If the employee has been employed for less than a year, you can offer and claim for an average of their monthly
earnings since they started work.
If the employee only started in February 2020, use a pro-rata for their earnings so far to claim.
This is not easy, but we can help with establishing the optimum figure for you and your employee.

13. What can you as the employer claim for?
80% of the employee regular salary up to a max of £2,500
Plus Employers NIC (13.8%)
Plus Employers Pension (3%)

14. How do you claim?
Through an online portal to be ready and open by mid-April 2020.
Further details to follow :
You will need to calculate the amount you are claiming. HMRC will retain the right to
retrospectively audit all aspects of your claim

15. How we can help?
1 We can help you find the optimum furlough agreement for you and
your staff.
2 We can help you with the submission of the claim in due course.
3 We can provide you with a bespoke fixed cost