Coronavirus Job Retention Scheme – Zoho Books

The global labour market has been experiencing challenges as a consequence of the COVID-19 pandemic. The severity of the impact is massive, and business owners are struggling to pay their employees in these uncertain times. In an attempt to support these organizations, the UK Government stepped in with a temporary relief initiative named the Coronavirus Job Retention Scheme.

With this blog, we’ll answer some of the basic questions about the scheme and extend our support with a free calculator that helps you estimate what grant amount you may be eligible for.

Coronavirus Job Retention Scheme (CJRS)

The scheme allows employers in the UK to furlough workers on 80 percent of their regular pay. Businesses can apply for a grant that covers 80% of their employees’ monthly wages, up to £2,500 a month, plus their associated Employer National Insurance contributions and pension contributions on that subsidized furlough pay.

According to the HMRC, 6.3 million Jobs have been temporarily laid off by 800,000 companies. As of May 3rd, the HMRC has shelled out £8bn in support of these businesses. This unemployment benefit has been vital in keeping small businesses afloat and preventing a steeper rise in unemployment. This scheme will continue in its current form until the end of July.

Update:

On 12 May, the Chancellor Rishi Sunak announced that the CJRS scheme will be extended until the end of October. There will be more flexibility so employers will be able to bring their furloughed employees back to work part-time and contribute to paying employees’ wages while still receiving support from the scheme. We’ll keep this space updated for any further announcements on the scheme.

Applicability

Businesses that have furloughed employees on their payroll can apply for this grant. Once employees are designated as furloughed, employers pay the normal wages and then submit the information to the HMRC to apply for reimbursements. In order to get the grant amount, an employee must be furloughed for at least three consecutive weeks.

Eligibility

You can only submit claims for furloughed employees who were employed as of 19 March 2020 and who were on your PAYE payroll on or before 19 March 2020. This means an RTI submission regarding payment to that employee must have been made on or before 19 March 2020. Here’s a more complete breakdown of eligibility by date:

Employee was employed with you as of this date	Date RTI submission regarding payment was made to HMRC	Eligible for CJRS
28 February 2020	On or before 28 February 2020	Yes
28 February 2020	On or before 19 March 2020	Yes
28 February 2020	On or after 20 March 2020	No
19 March 2020	On or before 19 March 2020	Yes
19 March 2020	On or after 20 March 2020	No
On or after 20 March 2020	On or after 20 March 2020	No

Our calculator

The grant amount calculation is a complex process. You must factor your pay period, claim period, gross pay for your employees, insurance contributions, pension contributions, and more. We’ve come up with a free calculator to help you get a quick estimate of how much you can claim for each employee for the selected pay period. We hope this will help you plan for the future and push through these tough times. We’re also keeping this blog updated on the latest announcements from the HMRC, so keep an eye out for any new information.