Several weeks ago, the Government put a scheme into place that effectively pays all employees 80% of their wages up to a cap of £2,500 per month, plus any employer national insurance contributions (NICs) and employer pension contributions where applicable. HMRC are busy setting up the portal that will be used to claim back any money owed.

Who can apply?

• Businesses including owner-managed businesses (where director's are the only employees)
• Charities and not-for-profit organisations
• Parents employing nannies
• Public sector organisations, although the Government expects most will still have the majority of employees working in frontline services

Which employees?
In order to reclaim the CJRS grant, employers must decide which employees to designate as furloughed, in other words those that would otherwise not be able to work if there was no work for them to do, but instead of making them redundant they can be furloughed instead. Other terms and conditions in employee contracts continue as normal unless they have also been varied.
Employees cannot do any work for an employer whilst on furlough. However, they can undertake training, work for other employers, work on a self employed basis or as a volunteer without it affecting their pay whilst on furlough. Director's will also be able to carry out duties in respect of statutory obligations such as filing accounts and confirmation statements, but that is it. No selling or marketing will be allowed.
Employees included are:

• Those with a start date of the 28th February 2020 or before, even if their first payment was included in their March pay because they missed the February payment
• Those on zero hours and fixed term contracts
• Apprentices
• Temps on PAYE at a recruitment agency

Those not included are:

• Deemed employees - those subject to off-payroll rules in the public sector as they appear to fall outside from the public sector engagers perspective
• Workers under a contract for services - mainly sole traders who are paid via an invoice (and who would need to claim under the self employed support scheme)

Not all employees have to be furloughed and they could be rotated based on need over the coming months as well.
Employees who have been made redundant or left their jobs and now possibly have no job to go to from the 1st March 2020 can be reinstated without penalty and furloughed.
Employees who have agreed to undertake tasks on reduced hours or by receiving restricted pay cannot be furloughed.
The employers payroll scheme must have been in existence on 28th February 2020.
How to furlough
Employers must mutually agree with employees, in writing including via email and a record of this kept, to a change in their contract temporarily as CJRS doesn't override employment law. This must state that the employee is being designated as furloughed and that there is no work for them due to COVID-19. It must also include what the employer will pay them over this period. Director's should write to themselves also, as a back up.
The period for furloughing clients is a minimum of three weeks. The current maximum furlough is three months but this will be reviewed in line with conditions closer to the deadline.
How much?
The Government will cover up to 80% of an employees gross wages to a maximum cap of £2,500 per month, or £30,000 per year. This equates to an annual gross salary of £37,500, which is around the national average.
Employers have 2 choices, either pay just the 80% of an employees wages and claim that back from the Government or pay more than the 80%, topping up an employees wages to their normal rate but still only being able to claim the 80% limited to the £2,500 cap.
Wages are defined as normal basic wages and salaries, they do not include fees, commission and bonuses. Pay from fees, commissions and bonuses can still be paid to employees but will not form part of the claim for the 80% grant. Directors cannot include dividends in their claim, only wages that are included in their payroll that has been submitted to HMRC. It is still unclear if overtime and cash allowances should also be excluded.
Employees whose pay is variable will be paid an average of their monthly wages. If they began their employment less than 12 months before 28th February 2020 then their pay will be averaged out over the period they have worked, and employers will also need to work out any employers NICs and pension contributions made. If the employees have been employed over 12 months then they are paid the higher of:

• their wages earnt in the same period in the previous year
• or, their average monthly earnings from the 2019-20 tax year.

If employees complete online training as part of their work whilst on furlough, they must be paid at least the national minimum/living wage for those hours spent completing the course, even if this is more than the 80% of their wage that will be subsidised.
Other guidance
Employees on unpaid leave can only be furloughed if that unpaid leave began after 28th February.
If an employee is on sick leave or self isolating then they will receive Statutory Sick Pay until they are well, they can then be placed on furlough straightaway.
Employees who are shielding in line with public guidance can be placed on furlough.
Employees with more than one job can be furloughed from each job as they are treated separately and the cap applies to each employer individually.
Statutory Maternity Pay/Maternity Allowance(self employed), Paternity Pay, Shared Parental Pay and Adoption Pay will still all be paid as normal. If you offer enhanced (earnings related) pay to employees who have already gone on leave or who are due to, then this is considered normal wages and can be included in claims.
Employees still have the same rights as always to sick and parental pay, unfair dismissal and redundancy payments.
Claiming?
The portal that will be used for claiming CJRS is currently being created and is hoping to be open towards the end of April. The claim will ask for the amounts to be claimed, more than likely in bulk, possibly split out into wages, NICs, and pension contributions as well as number of employees included, pay period, the business name, Employers PAYE reference, your name and telephone number and bank details. Employers must have a UK bank account in order to receive the grant. HMRC reserve the right to investigate claims and cross reference them to RTI data.
Claims can be backdated to the 1st March 2020, and you can only submit one claim every 3 weeks. HMRC will review the claim to make sure the employer is eligible and then make a payment. If the employer hasn't already paid the amount claimed to their employees then they employees should be paid as soon as they receive the claim.
We are unsure of whether or not HMRC agents will be granted access to the portal, but professional accountancy bodies are lobbying for this to happen. Fingers crossed that it will be open on time, and, for those of you who we currently undertake your payroll, allow us to have the same access as employers so that we can upload your data on your behalf.
And finally
Once the scheme ends, employers must make a decision on whether or not they can continue to employ their employees dependent upon their circumstances. If not, then employers may have to consider redundancy.