In a national effort to protect jobs the government is set to pay 80% of employee wages for those not able to work due to Covid-19 and the measures to restrict the virus.
The Coronavirus Job Retention scheme is open to all UK employers for at least three months, starting from 1 March 2020. It is designed to keep employees on the payroll and therefore enable businesses to reactivate their operations quickly after the crisis is over.
The government will pay grants covering up to 80% of the salary of eligible employees. The payments will be worth up to a maximum of £2,500 per month, just above the median income.
Who is eligible?
Any UK organisation with employees can apply, including:
- recruitment agencies (agency workers paid through PAYE)
- public authorities
- You must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.
Employees must have been on your payroll on 28th February 2020 and no longer working or generating revenue for the business. They can be full-time or part time, on agency contracts or on flexible or zero-hour contracts.
The employee’s wage will be subject to usual income tax and other deductions. HMRC grants will cover the lower of 80% of an employee’s regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage. Fees, commission and bonuses are not included.
You can also choose to top up an employee’s salary beyond this, if you are able to.
How to apply
HMRC is setting up an online service that will be available by the end of April. Claims can be backdated to 1st March 2020.