Our website uses cookies to enhance the visitor experience (what's a cookieCookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.). Are you happy for us to use cookies during your visits?
Please note: continuing without making a choice equates to giving us your consent, which you can withdraw at any time via our cookies policy page.

Fresh thinking and a Personalised Approach

Concentrate on what you do best!

Professional, Approachable, Forward Thinking

We are here to support you and your business

Not your typical accountants

Freeing you up to do what you do best!

Freeing you up to do what you do best!

Freeing you up to do what you do best!



Coronavirus Update: Job Retention Scheme

Will my business qualify for it?

Any business, regardless of size or sector, which otherwise would be laying-off staff as a result of the crisis can apply for 80% of those employees wage costs per employee up to a cap of £2,500 per month

Will all my employees be covered?

The short answer is – No.  The scheme is only for those employees who you would otherwise be laying off (making redundant).  Employees should not undertake any work for their employer when they are being “furloughed”

The scheme will not apply to staff who you have put on short-time working or cut their hours. If they have agreed to that then you will have to pay them a pro rata proportion of their salary.

How do we apply?

You will have to designate employees as furloughed employees through a portal which HMRC is currently building. They are expecting this will be up and running by the end of April.

We are expecting HMRC will reimburse the employer so the expectation is that the employer will make the payment to the employee and not HMRC making the payment to the employee.

What do I need to do now to place staff on furlough?

You need to try to get agreement of each individual employees to place them on furlough.

If you have a contractual right to lay off employees (i.e. a specific clause in your employee contracts) then you don’t need to get their agreement, but if not you will need to try and reach agreement with them. 

The alternative is to start a redundancy consultation process.  You must confirm the details of the furlough to your employees in writing.

What if employees don’t agree?

In employees do not agree to be furloughed, then you have to follow a fair redundancy process.  Details can be found on the acas website https://www.acas.org.uk/manage-staff-redundancies

Will my employees receive 80% of wages up to £2,500?

At the moment the guidance is not clear, all it says is that ‘HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500’  

Clarification is still required to see if employers NI, employees NI and auto-enrolment pension contributions will be deducted as part of wage costs from the 80%.

As soon as HMRC have clarified this we will update this article

What about the other 20%?

There is no requirement to top up, although some employers may choose to if they can afford it.

How is furloughed pay calculated?

We require clarification, although some commentators believe it will be based on average earnings in the 12 weeks to 29th February 2020.

My employee started in March – can they be furloughed?

We believe  the job retention scheme only applies to employees employed as at 29th February 2020.

Should furlough pay be calculated gross or net? 

Again, at the moment the guidance is not clear and there appears to be conflicting advice, as soon as there is clarification we will update this guidance.

What do I do about employees I have already laid off?

The Job Retention Scheme will be backdated to 1 March 2020, so you will be able to claim for staff who have been laid off from 1 March onwards because of Coronavirus.

In practical terms this means mean contacting them and offering to withdraw their dismissal by re-engaging them (on the condition that they are treated as being on furlough from their date of dismissal).

What if redundancy pay and notice pay has already been paid?

If this has been paid a condition of re-engagement should be that they repay these amounts to you, as they would not otherwise have received them.

A furloughed employee becomes ill – what do they get paid?

More clarification is again required, the sensible option would be that furlough leave is treated in the same way as say maternity or adoption leave so that once furloughed they get their 80% and do not have to be placed on SSP.

I can’t afford to pay wages now – what do I do?

This is a challenge for many businesses, as employees will want and need to be paid.

If cash-flow allows for you to pay the retention amount (once HMRC confirm how this is calculated) then you should pay this.

If you can’t the Government is advising you may be eligible for a Coronavirus Business Interruption Loan.

Need further support? Please contact us

We are experts in our fields, so please make contact.

Existing clients – please make contact with your normal director/manager.

Any other individual or business needing our help – Initially please email through to hello@spurlingcannon.co.uk leaving your contact details and we will come straight back to you.

All Authors | Post by: Richard Phillpott

Leave a Reply



Ramsgate: 01843 848 383 Ashford: 01233 424200