Self-Employed to be Helped Too

The self-employed, who were not covered in the previous announcements get similar aid to employees – a cash grant of 80% of earnings up to £2,500 per month, initially for three months.

Most self-employed workers will be eligible, but not those without an established record of earnings, those earning £50,000 or more or those who earn less than half their income from self-employment. 

Timing will be an issue as grants will not be paid until June.

More detail here. 

Furloughed Employees – More Detail

The UK Government has also provided further guidance on the Coronavirus Job Retention Scheme. Full details here but the headlines are:

  • The scheme will be open to all UK employers who started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.
  • Employers can claim 80% of furloughed employees’ usual monthly wage costs up to £2,500 a month.
  • Associated employer’s National Insurance contributions and minimum automatic enrollment employer pension contributions can be claimed in addition.
  • Furloughed employees’ pay will be subject to usual income tax and employee National Insurance contributions.
  • To qualify, furloughed employees cannot be working at all.Employees working reduced hours or on reduced pay will not qualify.
  • The scheme is open to all types of employees including part-time employees, employees on agency contracts and employees on flexible or zero-hour contracts.
  • Employees who have been made redundant since 28 February 2020 are covered if they are rehired.
  • Employees who were placed on unpaid leave on or after 28 February 2020 can also be furloughed.
  • Claims can be backdated to 1 March if applicable.
  • In most cases Furlough will need to be agreed and cannot be imposed unilaterally.
  • It may be necessary to consult with employees collectively about the change.
  • Employers may “top up” to 100% but do not have to.

The Coronavirus Job Retention Scheme is a very valuable tool to help maintain the workforce through the current crisis – it will be very important for employers to implement it carefully so that a very positive measure does not lead to unexpected liabilities.