Recently Chancellor Rishi Sunak announced that unprecedented measures will be put in place to protect millions of jobs as the economy struggles to cope with the Coronavirus crisis.
In order to stop the spread of the Coronavirus, the UK Government instructed the closure of entertainment and hospitality premises, like bars and restaurants, placing even more business sectors under intense financial pressure.
One of the biggest interventions of the Government is the new Coronavirus Job Retention Scheme which will protect jobs and avoid redundancies arising as a result of the crisis.
Instead of laying off workers, employers can contact HMRC for support to cover 80% of the wages of their workforce who remain on payroll but are temporarily not working during the Coronavirus outbreak.
All employers across the whole of the UK, including Scotland, large or small, charitable or non-profit, will be eligible for this scheme.
The Government will pay up to 80% of workers’ pay, up to a maximum of £2,500 a month as long as workers are paid through PAYE.
The scheme will cover the cost of wages backdated to 1st March 2020 and for at least three months going forward.
Furthermore, the Chancellor confirmed that no limit had been placed on the amount of money available.
To access the scheme employers will need to identify affected employees as furloughed workers and notify their employees of this change.
However, it is necessary for employers to negotiate this change of status with employees before contacting the HMRC as employment contracts are still in working.
Information regarding furloughed employees and their earnings should then be submitted through an online portal to the HMRC.
It is expected that the payment of grants will be made within weeks and hopefully by the end of April.
This scheme has been widely welcomed; however, not all employees are covered and payroll software providers are still trying to work out how to implement it quickly.
Jon Doyle is Founder and Financial Planner at Juniper Wealth Management. Advising clients since 2008 he has guided clients through good time, bad times and the ugly. With a clear vision on how advice should be delivered and strong opinions on how we should be investing money in order to live the life we want to live free from money worry.