furlough system

NEW FURLOUGH SYSTEM FOR EMPLOYEE WAGES UP AND RUNNING

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The Coronavirus Job Retention Scheme (CJRS) furlough system or ‘claims portal’ opened on Monday 20 April and early indications are that it seems to be working smoothly but with a few teething problems as you would expect from a brand-new system.

In the run up to the start of the furlough system there was limited detail from HMRC on what could be claimed as the initial guidance was rather sketchy and did not cover all situations. The government also decided late on to change the qualifying conditions so that it would apply to those on the payroll at 19th of March instead of 28th of February to cover those employees taken on in March, or so we thought. It turned out that the employee needed to be included in an RTI (real time information) submission by 19 March to be included.

Remember that CJRS allows employers to claim 80% of an employee’s regular pay subject to a limit of £2,500 a month if they have been “furloughed”, in other words unable to work during the crisis.

The claim can also include employer’s NIC and the employers 3% auto-enrolled pension contribution on the restricted amount.

Note that company directors may be furloughed provided they do not work for the company other than complying with their statutory obligations. The furlough claim only applies to their salary not dividends.

Depending on how long the Coronavirus lockdown lasts future claims should be a lot more straightforward now that we have more detailed guidance from HMRC.

 

As usual if we can be of assistance please get in touch.

 

 

Related Articles to Furlough System

 

CHANCELLOR EXTENDS FURLOUGH SCHEME TO END OF JUNE

Download Furloughing Employees and Claiming Wages through the CJRS fact-sheet.

Coronavirus Job Retention Scheme: step by step guide for employers

 

 

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