The Government has committed to pay the wages of employees unable to work due to the coronavirus pandemic.

On Friday, the government announced it would pay 80% of salaries for staff who are kept on by their employer.

All UK businesses are eligible.

In order to access the scheme, you will need to:

designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.

Chancellor Rishi Sunak, who announced the support package at the daily coronavirus briefing with the PM, said closing pubs and restaurants would have a “significant impact” on businesses.

But he added the government intervention – covering wages of up to £2,500 a month – would mean workers should be able to keep their jobs, even if their employer could not afford to pay them.

It is understood the wage subsidy will apply to firms where bosses have already had to lay off workers due to the pandemic, as long as they are brought back into the workforce and instead granted a leave of absence.

We have already received enquiries from clients asking how they can access this support. But unfortunately we do not have that information as yet. So we shall try and keep you posted.

However, looking at the BBC news website, we believe that employers will be able to access grants, by the end of April and they will be backdated to March and the scheme will last three months at least, in the hope of preventing mass unemployment.

This 80% guarantee only relates to those on PAYE. Self employed people will not benefit from these grants, but instead the protection for them will come through a more generous benefits system, and they will also be able to pay tax later.

Those on working-age benefits will see a more generous Universal Credit system, rising by about £20 a week for the next year. The same rise will be given to those still on the working tax credit system. The government says this will benefit more than four million of the lowest-income households.

Public sector workers are not covered because most of them have their wages paid directly by the government.

As we learn more, we shall pass it on to you.

In the meantime, stay healthy and safe. Best wishes from the NATA team.