What is Furloughing?

The Job Retention Scheme has been set up to help pay people’s wages.  Any employer in the country (small or large, including charitable or non-profit) will be eligible for the scheme.

The scheme makes regular references to ‘Furloughing‘ employees, a largely unheard-of term now the ‘F’ word of choice around the country. But what does it mean?

The Government published further guidance on the scheme and the definition of ‘Furloughing’ on Thursday 26th March 2020. We would strongly recommend that all clients considering applying, avail themselves with the details of the scheme and the rules around furloughing, before making an application.

Our friends at Pure Employment Law have put together a useful briefing note, which you can read and download here:

Furloughing Briefing Note – Pure Employment Law

Here is a reminder of the high-level details of the Job Retention Scheme:

  • Employers will be able to contact HMRC for a grant to cover most of the wages of their workforce who remain on payroll but are temporarily not working during the coronavirus outbreak.
  • UK workers of any employer who is placed on the CJRS can keep their job, with the government paying up to 80% of a worker’s wage costs, up to a total of £2,500 per worker each month. 
  • This will be backdated to 1st March and will be initially open for 3 months, to be extended if necessary.
  • It can apply to anyone who was on the payroll at 29 February 2020, even if they have subsequently been made redundant, as long as they are reinstated on the payroll
  • Application will be via a new online portal, which HMRC is urgently working to get set up. There will be a delay before the portal is live and the funding is readily available. The portal will undoubtedly be extremely busy on launch
  • No comment has currently been made on whether company Directors will be eligible to apply for funding for their usual monthly salaries.

If you have made redundancies or have been considering it and would like to apply for the support from HMRC, but need help planning cash flow in the meantime, please contact us.