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Anyone want to hazard a guess as to how this will work? Genuine question.
I’m having to make quite severe staff related decisions sooner than expected and I’m wondering if the latest government news will help.
My understanding from what has been released is that the government will cover 80% of non-working individuals wage up to £2500 per month. If the worker receives this can the employer then ask the worker to work? I suppose I’m asking if this can be used to subsidise wages so that employers can lower wages on account of reducing turnover.
Any views?
I would assume it only covers the times they’re not working.
the government will cover 80% of non-working individuals wage up to £2500 per month. If the worker receives this can the employer then ask the worker to work?
I think there might be a clue in the "non working" part of that statement 🤣
In the press conference, they said it would be done through PAYE somehow.
The worker has to be furloughed to get it.
If you need support in other ways, there were lots of announcements in the press conference - I wasn't paying a lot of attention at the time.
So the employer still has to cover 20% of the wage bill with possibly no revenue coming in?
Not necessarily, our employers are now laying us off for three weeks with zero pay (announced before today's government announcement). Depends on your contract.
No, the employer is under no obligation to cover the remaining 20% of the employees wage.
So the employer still has to cover 20% of the wage bill with possibly no revenue coming in?
Did you know that when you laid them off the employees had to cover 100% of their bills with no wages coming in at all?
I hope it happens quickly. My lovely tenants - one is laid off with no pay, the other stuck in Poland ( they are a couple). I have had to cut the rent I charge them 'cos I do not want to take all their savings or lose a lovely long term tenant. Their lack of wages is costing me several hundred a month ( I can afford it fortunately) ( but thats better than it costing them their home)
The devil will be in the detail but I was quite impressed by the announcement and what was involved.
The key issue is how long will it take for money to get to the workers, I guess.
The key issue is how long will it take for money to get to the workers, I guess.
I expect this shit will be all over before any money gets paid 😉
Did you know that when you laid them off the employees had to cover 100% of their bills with no wages coming in at all?
Yep, that’s why I’m trying to keep my business going as long as possible until I know my staff will be ok.
From what I understand there is also a VAT “holiday”. So hopefully the money that is “saved” from this can be used to help pay wages up to the £2.5k pm Per furloughed employee. Assumes you are VAT registered and in a situation where you pay VAT over. This then gives HMRC a few months to sort the clusterphuck that this will be out, employer gets the money from HMRC at some point in the future and then uses that money to pay the VAT.... I think.
( I can afford it fortunately) ( but thats better than it costing them their home)
TJ 👍
ebikegum - you won't be able to use it to say come in anyway otherwise every employer would claim every employee was in this camp, whilst getting almost free labour.
You MIGHT (depending on the rules) be able to cut someone's hours and claim for that portion of the reduction.
I assume it will be paid in much the same was as SMP is for employers that qualify for a refund.
There is no obligation to pay the remaining 20%, the chancellor said employers would have the option to top it up.
I hate how this bailout application appears to be completely at the mercy of the employers, they can choose which "sacked" employees to help.
This whole thing concerns me a bit. It's great that the government are stepping in to help those unable to work due to the restrictions set in place by the government.
However, for those of us (and I'm guessing there are many on this forum) who remain able to work from home, sat in front of laptop, yet their employer is unable to generate the revenue to pay them because of the restrictions set in place by the government.
Depending on the rules, I see the options here as:
1) Employees are stopped from working completely, in order to save the company at the expense of productivity and economic output.
or...
2) There is very little support for this sector other than loans, which, unless there is a very sharp upturn, will ultimately destroy many businesses.
I'm not sure I understand this correctly. I get the impression this doesn't scale well across various industries, and that we have solutions that work in very specific circumstances, but not necessarily well in some of our largest sectors of employment. Surely that can't be right?
For my business these measures cause us a major dilemma.
Before Friday we were fully expecting to continue trading although our revenue has halved. I have promised staff their jobs are safe and full pay for 2 months minimum. I've estimated we can do this and cover costs, with a bit of belt tightening.
Now we have an alternative, which is to stop trading and claim this grant. However I've worked out we'll actually be worse off, what with continuing overheads and zero money coming in.
However the financial difference is not that big, so it's more a moral question now.
I'm against closing for the sake of it because we are a food business and I see ourselves as providing a service for the city. People still need food, especially now. We are also supporting lots of local suppliers too.
The biggest reason to close is staff welfare which we take very seriously.
There is no mention in the guidance so far on having to close your business to claim the support. It looks like you have to notify HMRC of which staff you are intending to 'Furlough' and then they will subsidise their wages. The way I read it you can put most of your staff on a furlough status, carry on with core staff to do whatever work is available, and use whatever revenue you can bring in to keep whole business afloat.
From Here
https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businessesSupport for businesses through the Coronavirus Job Retention Scheme
Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis.
Eligibility
All UK businesses are eligible.
How to access the scheme
You will need to:
designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)
HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.
If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.