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Claims can be made from December 2020 and will be paid on a monthly basis in arrears – that is after the employee has been paid and HMRC notified through the Real Time Information (RTI) submission.
Employees will be paid in full by their employer for time worked but, for hours not worked, the cost will be split between the employer, the Government (through wage support) and the employee (through a wage reduction).
The Government will pay a third of hours not worked up to a cap of £697.92 a month. The grant will not include Class 1 employer NICs or pension contributions and these will remain payable by the employer.
The employer will also contribute a third – the Government’s expectation is that employers cannot top up their employees’ wages above the two-thirds level.
Where the cap does not apply, this will mean that employees receive at least 77% of their normal wages.
|Hours Employee Worked||33%||40%||50%||60%||70%|
|Hours Employee Not Working||67%||60%||50%||40%||30%|
|Employee Earnings (% of normal)||78%||80%||83%||87%||90%|
|Gov’t Grant (% of normal wages)||22%||20%||17%||13%||10%|
|Employer Cost (% normal wages)||55%||60%||67%||73%||80%|
The only condition for small and medium enterprises is that the employer has a UK bank account and UK PAYE scheme. Large businesses will need to show turnover has fallen following COVID-19.
The Government expects that large employers using the Scheme will not make capital distributions, such as dividend payments or share buybacks (further details of this will be included in the future guidance).
The scheme is available irrespective of claims made under the Coronavirus Job Retention Scheme and has no impact on eligibility for the Job Retention Bonus.
To be included in the scheme, an employee must:
Employees can move in and out of the scheme and do not have to work a consistent pattern. However, each period must cover a minimum of seven days.
The scheme will use “usual wages” calculations similar to the Coronavirus Job Retention Scheme. Where staff have previously been furloughed, the calculation of usual pay and/or hours will be based on their underlying contracts, not the amounts whilst on furlough.
Employees cannot be made redundant or put on notice of redundancy during the period within which their employer is claiming the grant for that employee.
In line with the other support schemes, HMRC will carry out checks and may withhold or require repayment of claims made fraudulently or based on incorrect information.