cheap accountants - Covid-19

At the end of last week the UK Chancellor announced that the 80% Furlough Grant, officially known as the Coronavirus Job Retention Scheme will be extended to the end of March 2021 for the whole of the UK. This means that a Government grant of 80% of normal wages will once again be able to claimed during the British winter months. This has been triggered by the current four week lock-down that was instigated late last week in an effort to reduce the rise and spread of Covid-19.

What will the Government Pay Me?

The Government will once again pay up to 80% of all employees normal monthly wages for hours not worked. This payment will be capped once again at a monthly figure of £2,500 a month per employee.

So if you are a company director and pay yourself a monthly salary of £732 a month then you will be able to claim  up to £585.60 from the Government for hours not worked.

The UK government will pay up to 80% until the end of January 2021. After this date the grant scheme will be reviewed and a decision will be made on whether or not employers will be asked to contribute more to employee wages. This means that the Government contribution could well be tapered back again during February on-wards and maybe reduce down to say 70% and then 60% or less.

When does the Grant Start?

The newly extended 80% grant will start from 01 November 2020 and initially run up to 31 January 2021.

The first grant claims can be made from 11 November 2020 on-wards.

Do I qualify for this Grant?

The good news here is that you don’t need to have previously claimed the furlough grant (CJRS) previously.

The grant is open to all employers across the UK whether their business is open or closed.

Essential qualifying criteria:

1. An employee must have been employed via the company payroll on 30 October 2020.

2. A PAYE Real Time Information (RTI) submission must have been made to HMRC between 20 March 2020 and 30 October 2020. This must have been a notification of earnings RTI.

Can I work?

Under the extended scheme you are able to both work and claim the grant. This means that employers have far more flexible options and can ask employees to work part or all of their normal hours.

The grant can then be claimed as 80% of all hours not worked.

Employers will need to pay for all hours worked by an employee.

Employers will also need to pay the cost of all National Insurance and Pension contributions. The grant will not cover these payments.

What happens to the Existing Furlough Grant Scheme?

All claims for the existing grant that is currently paying up to 60% of employee wages for the month of October will close for claims on 31 November 2020.

Quick Summary

  • New furlough grant paying 80% of normal monthly wages.
  • Claims capped at £2,500 a month per employee.
  • Operates from 01 November 2020 to 31 January 2021.
  • Employees can work and claim grant for hours not worked.
  • Employee must be on payroll with RTI submitted to HMRC on 30 October 2020.

 

We will remain open throughout the Coronavirus pandemic so you can rest assured that our service will continue and you can reply on your trusted accounting partner during these challenging times.