AIM…

The scheme is designed to support those businesses who have been severely affected by coronavirus (Covid-19) and is aimed at helping those business where they have workers available for work but where no work is available eg a forced closure, where work diminishes or where the business can’t afford to continue to operate within the current structure.

PURPOSE…

The purpose is to avoid people losing their jobs during this interim period who would otherwise have been laid off or made redundant.

HELP AVAILABLE…

Grants will be available to cover up to 80% of wages up to a maximum of £2500. Employers can also choose to top up salaries where funds are available.

The grant covers wages backdated to 1st March so if people have lost their jobs in the meantime, they can be reinstated and furloughed. This is the employer’s decision.

The grant means that employees and workers can retain their jobs even if their employer can’t afford to pay them.

The employer will need to get agreement from the worker on moving them to ‘furlough’ status. The minimum furlough period is 3 weeks.

The furloughed worker can’t work in the business during the period of furlough but they can undertake voluntary work or training (providing they don’t provide services to or generate revenue for the business). They must continue to be available for work. Individuals may be eligible for universal credit.

The grant will be accessed via HMRC – a online portal is currently being developed for businesses to make their applications for grant funding. Employers will submit their claim and they will receive confirmation of

It is not a payment to top up…

statutory sick pay if someone isn’t well enough to work and they are off sick. Furlough may apply at the end of a sickness absence or self isolation period.
no pay if someone decides they don’t want to work
no pay or alternative if someone can’t work because the need to look after their children during the school closures
wages for employees who have been placed on short time working ie reduced hours

What employers need to do:

Check your contracts of employment. If lay off/short time working clauses exist, invoke those clauses and then seek agreement from affected workers to be furloughed. If lay off/short time working clauses are not there, employers will need to agree the proposed new terms with their affected workers.

Once access to HMRC’s online portal is made available, designate your affected workers as furloughed. We expect grants to be available towards the end of April.

If businesses are in financial hardship and need urgent cash flow support they should contact their bank; they may be eligible for a Coronavirus Business Interruption Loan.

HMRC may retrospectively audit all aspects of applications for grant funding.