Furlough – What we know so far.
Around 80% of the questions coming into MATCH at the moment are regarding the 80% Coronavirus Job Retention Scheme.
Apart from the most asked question “How do you pronounce Furlough”? (Furr-low), some of the questions we are receiving are better answered by a HR expert. We asked Alice Hosker of Home of HR to provide us with run-down of what we know:
It is obvious from the article that a process does need to be followed. To help with that process, Alice has kindly supplied us with a template letter to provide to any Furlough employees.
We have also answered some additional questions below:
How do we make a grant application:
The Government is hoping an online portal will be set up by the end of April 2020. We understand it will be a case of uploading the wages information to the portal which will then allow the claim to be made.
If we process your company payroll, we will be able to assist/complete this for you.
When will the grant system start to repay employers:
Unfortunately there is no fixed date for this until the portal is built and working (see above). Once the scheme is up and running, the payments will still have to be processed and repaid which could add to this time. If April 2020 is the date, it could help monthly paid employees but not those who pay more frequent.
At present it would appear that the employer will have to cashflow the payments until the grant scheme starts to pay-out. The official guidance ends with the following ‘ If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan’. This would suggest there are no plans to help specifically with this cashflow issue.
If cashflow is going to be a issue, our suggestion would be to start making employees aware of the situation now so when April comes, everyone is aware of what may happen.
Can a Director be Furloughed:
As covered in the article, Furlough means to have stopped working. It is unlikely that a Director of a business will cease to work completely. Although they may not physically complete any work, there may be other administrative duties to complete for the business such as talking to customers, emails, etc…
We therefore do not believe that a company director would qualify at this stage based on the current guidance. This may change but we are expecting an announcement soon (maybe Friday if you believe a certain Moneysaving Expert) which may assist Directors who cannot be Furloughed.
The situation is fast moving and the Government are keen to get measures in place to help employees. However, this is something that has never been done before, we normally pay HMRC as opposed to the other way around, and payroll can be very complex. There are many scenarios but the guidance we are receiving is just not clear enough for every eventuality at present.
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Please do get in contact if you have any questions.
Everyone @ MATCH Accounting