Following the Prime Minister and the Chancellor’s announcements yesterday afternoon, the Government updated a number of guidance documents which were issued late last night for businesses, employers and employees. We cannot stress enough the need for everyone to read these updates by going to:-
It is essential that those businesses, which have been told to close as of last night and are considering operating a takeaway/delivery service in the meantime and all businesses which are considering instructing staff to undertake other tasks within their businesses while closed, whether instructed to or not, pay particular attention to the guidance notes on Support for Businesses through the Coronavirus – Job Retention Scheme. (Also see note below*).
Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
All UK businesses will be able to access this funding and employers will need to:-
- designate affected employees as ‘furloughed workers,’ and notify their employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation.
- submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required).
- HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
*SPECIAL NOTE – Whilst not clearly highlighted in the Government’s guidance on support for businesses, the Government’s guidance for employees states:-
“If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a “furloughed worker”. This would mean that you are kept on your employer’s payroll, rather than being laid off. To qualify for this scheme, you should not undertake work for them while you are furloughed.”
This indicates that if employees are designated as “furloughed workers” they should not undertake any duties for their employer. They are in effect laid off, but remain on the payroll.
Please also note that any references in the guides to commercial rates reliefs and grants only refer to England. The Scottish Government have announced almost identical rates reliefs and grants for businesses in Scotland, but the grant banding is slightly different due to differences in the commercial rating system in Scotland.
All the issues surrounding COVID-19 are very fluid with changes and announcements being made on a daily, if not hourly basis. All business owners should regularly check both the UK and Scottish Government web sites.
Disclaimer – The above is the SLTA’s understanding of the current information available and whilst every attempt to ensure the accuracy and reliability of the information contained above has been made, the content is for general information purposes only and should not be used as a substitute for consultation with professional advisers and Government bodies. The SLTA does not represent, warrant, undertake or guarantee that the use of this document will lead to any particular outcome or result. The SLTA shall not be liable to you in respect of any business losses, including without limitation loss of or damage to profits, income, revenue, use, production, anticipated savings, business, contracts, commercial opportunities or goodwill.