Coronavirus Job Retention Scheme – Forlough Scheme

This temporary grant scheme devised to help employers whose operations are severely affected by coronavirus, is availale to claim on portal from 20 April.

Employers must notify employees first and get an agreement in writing. Furlough agreement is an amended contract, with employment law rules and rights still holding true. It enables employers to retain staff who will be needed when they will begin to make their business and it should last at least three weeks.

The agreement should include :

  • the date furlough starts
  • how much the furloughed worker will be paid
  • when the furlough will be reviewed
  • how to keep in contact during furlough.

The second step is to claim the grant. Employers will submit claims to HMRC through a new online portal. Employers must be enrolled for PAYE online and have available this information before applying:

• Employer PAYE reference number
• Number of employees being furloughed, which will dictate the level of detail and upload
• Names, national insurance numbers, works numbers for furloughed employees
• SA UTR or CT UTR or Company Registration Number
• Claim period (start and end date)
• Amount claimed
• Bank account number and sort code
• Contact name and phone number

As the system will take time to build, businesses should look to the Coronavirus Business Interruption Loan Scheme to support cash flow in the meantime.

The maximum grant will be calculated per employee and is the lower of:
• 80% of ‘an employee’s regular wage’ and
• £2,500 per month
Plus the associated employers’ national insurance contributions (NIC) on this amount and the minimum automatic enrollment employer pension contributions on that wage.
Fees, commission and bonuses should not be included.

This gives a maximum cap of £2,500 + £245 (Employers’ NIC) + £59 (auto enrolled pension contribution) = £2,804 of total possible grant that can be applied for per employee per month.

Furlough Letter free to download and use:

CJRS letter Template for employer and employee, with the terms of the furlough agreement. Microsoft Word format.

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