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Coronavirus update: HMRC provide Furlough Scheme details

27th Mar 2020
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On 26 March (yesterday as I write), HMRC have published more information on how employers can claim for furloughed employees.

The good news is that the process appears to be pretty straightforward and the application and payment process is not dependent on payroll software having to make any additional changes.

This means that employers can make their claims (backdated if appropriate to 1 March 2020) for any minimum 3 weeks period without waiting for software updates.

Payments will be made directly into employers’ bank accounts and so again, there should be no undue delay from any third party (obviously HMRC will be under a massive amount of strain because of the anticipated volume of applications).

The less good news is that employers won’t be able to apply until HMRC have made the online portal available, which will be sometime before the end of April.

But that still means you can get the information together in preparation.

I’m not going to replicate the document here, because it needs to be read in full, but some of the key points are:

  1. This relates to employed people (whether on salaries or variable/zero hour contracts);
  2. For variable hour workers the calculation is the higher of either the same month’s earning from the previous year, or the average monthly earnings from the 2019-20 tax year (average monthly earnings for the employed period for employees who have worked less than a year)
  3. National Minimum Wage does not apply to furloughed earnings, but any earnings for hours actually worked (including training) must be paid at least at NMW/NLW rates;
  4. A 2 week break for new mothers (4 weeks if they work in a factory/workshop) is mandatory.  Normal SMP provisions also apply, should mothers continue to want to have a longer break;
  5. Automatic Enrolment still applies (with contributions and calculations based on the payments made - so no difference in the calculation method there);
  6. National Insurance liabilities apply for employers on the paid amount;
  7. Employers can top up from the 80% level;
  8. Employees made redundant since 28 February 2020 who are re-employed can be claimed for;
  9. Any redundancies at the end of this scheme will still have the same statutory obligations attached (i.e. these individuals are still treated as being employed while they are furloughed).

Much more comprehensive information from HMRC is available here

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