COVID-19: Job Retention Scheme
23 March 2020
23 March 2020
Aspire Comment
Government has been announcing new measures daily in order to deal with the current outbreak of the COVID-19 virus as effectively as possible to ensure as many businesses and jobs survive these unprecedented times.
The use of the Job Retention Scheme will include changing the status of employees who would have been laid off due to the COVID-19 crisis to “furloughed workers” which will keep the individual on the company’s payroll and allow the employer to claim a grant of up to 80% of their wage for all employment costs, up to a cap of £2,500 per month. It is important that despite these difficult, unprecedented times where the goalposts are regularly shifting, business decisions such as choosing to utilise these schemes or switch to alternative working arrangements are completed correctly and in line with the current employment law requirements.
We are not sure yet how this will impact those individuals who are engaged by contracting intermediaries, commonly known as umbrellas, or agencies. Individuals engaged on a temporary basis may be engaged on various contacts including zero-hour contracts, 336 guaranteed hours contracts or contracts which include a lay-off clause. We are seeking further clarification on this point.
We were surprised to see Government deferring Valued Added Tax (VAT) payments for 3 months automatically. It has always been the stance that it is not good business practice to utilise VAT payments as cash flow but the deferral of VAT payments by the Government during this time would appear to encourage such action.
View the full guidance here.
The information changes so rapidly and we will try our best to keep you updated but for full and accurate updates, we would recommend checking the Government website.