Now that we have a clearer picture of how to claim for your furloughed employees, we have updated our guidance. Payments will be made every three weeks. This is because three weeks is the shortest period a furlough can last.
You must have:
- created and started a PAYE payroll scheme on or before 28 February 2020;
- enrolled for PAYE online – this can take up to 10 days;
- a UK bank account.
Anyone with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities.
Apprentices
Apprentices can be furloughed in the same way as other employees and they can continue to train whilst furloughed.
However, employers must pay Apprentices at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage for the time they spend training. This means you must cover any shortfall between the amount you can claim for their wages through this scheme and their appropriate minimum wage.
You are entitled to claim:
- 80% of your staffs wages up to a maximum of £2500, this includes people on the National Minimum Wage;
- The minimum automatic enrolment employer pension contribution on the 80%;
- Employer National Insurance contributions on your furloughed employees pay.
What is included in the calculation of employees wages:
- Pay;
- Past overtime;
- Fees and compulsory commission payments.
What is not included:
- Discretionary bonuses;
- Discretionary commission;
- Tips;
- Taxable benefits in kind;
- Non-cash payments;
- Benefits provided through salary sacrifice e.g. pension payments.
HMRC has agreed that Covid-19 counts as a life event that could allow changes to salary sacrifices.
What isn’t covered
- Apprenticeship levy;
- Student loans;
- Additional National Insurance of pension contributions you make to top up employees salaries;
- Any pension contributions that you make above the mandatory employer contribution.
Making a claim
- You will need:
- your ePAYE reference number;
- the number of employees being furloughed;
- claim start and end dates;
- amount claimed;
- your bank account and sort code;
- your company contact name & phone number.
- Calculate the amount you are claiming:
- The claim can only be made shortly before, or when you are running payroll.
- You cannot make a claim before you run payroll.
- if you do not intend to ‘top-up’ the employee’s pay for the 20% of income not covered, you need to ensure that the payroll is processed using only the amount calculated as your claim.
- You will make the claim through the portal that HMRC expects to introduce by the end of April 2020.
Furloughed workers can be paid the lower of 80% of their salary or £2500 even if, based on their usual working hours, this would be below their appropriate minimum wage.
Stay Safe
From Niel, Yvonne, Sam, Jen and Alex. We are People Matters because your people Matter.