- What is the Job Retention Scheme?
- How much can I claim?
- Who is eligible?
- Furloughed employees
- Can furloughed employees still work?
- Is the grant tax free?
- What do employers need to do?
- What if your employee is on unpaid leave?
- What if your employee is on Statutory Sick Pay?
- What if your employee has more than one job?
- What if your employee is on Maternity leave or Paternity leave?
- How to work out what you can claim
- What if my employee’s wages vary?
- What will I need to make a claim?
- How do I make a claim?
- What happens when you have claimed?
- Income tax and National Insurance
- The Tax treatment of The Coronavirus Job Retention Scheme
What is the Job Retention Scheme?
It is a temporary support measure to help all UK employers, pay their employees whilst their business is closed, directly as a result of the Coronavirus.
Such as Dentalpreneurs working in dental practices, for at least 3 months, starting from 1 March 2020 to 31 May 2020.
How much can I claim?
Employers can claim 80% of the wages costs up to a maximum of £2,500 per employee per month.
Including Employers National Insurance contributions and the minimum auto enrolment employer pension contributions.
Who is eligible?
All UK Employers who started their PAYE scheme on or before 28 February 2020 can access the scheme. Employers must have a UK Bank Account.
To claim the Job Retention Scheme, employers must furlough their respective employees.
A furlough employee is one that is on temporarily leave of absence.
They can be:
Employees on agency contracts
Employees on zero hour contracts
All of which must have been on the payroll as at 28 February 2020.
Can furloughed employees still work?
The furloughed employee cannot work for that organisation.
Is the grant tax free?
The grant will still be subject to tax and payroll deductions.
What do employers need to do?
Employers need to write to employees who will be furloughed, communicating the process moving forwards.
What if your employee is on unpaid leave?
Only employees after 28 February on unpaid leave can be furloughed. Not before.
What if your employee is on Statutory Sick Pay?
Employees who are self isolating and/ or are on sick leave, will get Statutory Sick Pay first.
They can be furloughed thereafter.
The grant you will get from HMRC is the lower of:80% of your employee’s gross monthly wages and £2,500 per month, not including any bonuses or commission.The 80% calculation is based on the employees wages as at 28 February 2020.Tweet
What if your employee has more than one job?
Employees must be furloughed for each employer they work for.
What if your employee is on Maternity leave or Paternity leave?
Employees who qualify for Statutory Maternity Pay, will be eligible for 90% of their average weekly earnings for the first 6 weeks, followed by 33 weeks of pay paid at 90% of their average weekly earnings or the lower of statutory flat rate, currently £148.68 a week, rising to £151.20 a week from April 2020.
How to work out what you can claim
The grant you will get from HMRC is the lower of:
80% of your employee’s gross monthly wages and £2,500 per month, not including any bonuses or commission.
The 80% calculation is based on the employees wages as at 28 February 2020.
What if my employee’s wages vary?
If the employee has been employed for greater than 12 months.
You can claim the higher of:
1) Wages on average for the 2019/20 tax year
2) Wages on the same month in the prior year
If your employee was employed for less than a year.
You can claim 80% of the average pay over the period employed.
What will I need to make a claim?
- your ePAYE reference number
- the number of employees being furloughed
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 weeks)
- your bank account number and sort code
- your contact name
- your phone number
How do I make a claim?
You will be making a claim outside of the PAYE system. The new online portal will be the system that is used to make your claim. Which will be available at the end of April.
You can submit one claim every 3 weeks, which is the minimum length an employee can be furloughed for. Claims can also be backdated to 1 March 2020.
What happens when you have claimed?
HMRC will pay the grant to your nominated UK bank account via BACS.You need to make the claim based on your payroll amount per employee.
You must pay the employee all of grant received and not deduct any commission or fees.
Income tax and National Insurance
Furloughed employees 80% grant of their wages will subject to Income tax and the employer will be responsible for Employer National Insurance contributions and auto enrolment contributions. Which will be received from the Grant’s additional payment.
The Tax treatment of The Coronavirus Job Retention Scheme
The payments received must be included as income, in the businesses calculation of taxable profits and deduct employment costs in the normal way.