How can a Business Claim 80% Wages for Staff During the Coronavirus Pandemic
Due to the outbreak of Coronavirus in the UK, workers are unable to continue their jobs. In this tough situation, the government is taking some steps to avoid the businesses from sinking.
Why is the Government paying a Grant of 80% of Wages?
To slow down the spread of covid-19, on the 23rd March the government locked down the UK and instructed people to stay at home. For this reason, businesses are closed for an uncertain period. Therefore, the UK government is taking steps and initiatives to save the economy as well as the businesses.
Who is eligible for “the Coronavirus Job Retention Scheme’’ for the furlough Workers?
Businesses that are UK based regardless of their size, profit based or non-profit based are eligible to this Scheme, following the words of the Chancellor. The scheme is permitted to the furlough workers who are added in the payroll scheme from 28 February 2020. The Authority has declared that there will be no limit for this grant and every single furlough worker has to get it.
The CoronaVirus job retention scheme is from 1 March 2020 to May 2020, so is to be backdated. Initially, it will last for at least 3 months and will be extended if the government finds it necessary.
Who is a furlough Worker?
Being a furlough worker has the possibility to avoid layoff and get an unpaid leave of absence. It is a leave sometimes granted by government or institutional employees in different situations. Furlough workers are not allowed to work during this period.
Furlough workers are those who are not able to work because of the coronavirus pandemic. Their workplaces have been forced to shut down or they are unable to work due to the pandemic. In the current situation in the UK, people are advised to stay at home, which made the businesses vulnerable and the situation forced them to shut down, which as a result will crash the economy. Therefore, to keep the businesses afloat, the government decided to consider the workers as ‘Furlough’ and pay them grants.
How is it going to be paid?
The grant will be paid to the employer through a new online system which is being built for this purpose. Employers have to keep the employees into the payroll system without working. The employer will pay the employee through payroll. For a claim, they will need the important information of the employer and employee including; the number of employees being furloughed, the claim period and the claim amount, PAYE reference number, bank account name and details, contact name and phone number.
How the Schemes will be administered by HMRC:
• 80% of ‘wages’ up to a cap of £2,500 per month, which includes employer’s general NIC and pension contributions.
• £2,500 per month.
The research said that these measures would cost about £78bn but save hundreds of thousands of jobs.
The precedent is just to guide about the scheme, before taking any decisions, consider talking to your accountants. Taj Accountants in London is proud to be a specialist small business accountants and always happy to support to claim this grant.