de Jong and Phillips LLP

Furlough FAQ's

Furlough FAQ's

By Pam Phillips

There is a lot of support available to businesses during the coronavirus pandemic but the challenge for business owners is working out what they can take advantage of and how. As accountants, we are well placed to help.

We’ve been speaking to our clients and have pulled together a list of the most commonly asked questions about the job retention scheme and ‘furlough’. New announcements are being made daily so, whilst the information here is correct as, at 25/3/20, things might have moved on by the time you are reading this so please do call us if you have a question.

Under the job retention scheme, the government will cover up to 80% of small business staff wages while the coronavirus pandemic continues, capped at £2500 per employee per month.

Furlough Frequently Asked Questions

What do I need to do to furlough an employee?

You’ll need to designate employees as ‘furloughed workers’, and notify them of this change. This may involve a negotiation with your employees for them to agree to this. The agreement should be documented and signed by both yourself and your employee. You may want to involve a HR specialist in this process.

Do I need to pay the 20% top-up if I furlough workers?

No, but this will need to be negotiated with your employee. If the employee does not agree then an alternative is to consider redundancy. We would recommend speaking to a HR specialist if this situation arises.

How do I get paid from government if I furlough staff?

You will need to submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal which is being built by HMRC. HMRC is urgently working on setting up a system for making reimbursements to employers.

When will the first furlough payment be received?

HMRC have said they expect the majority of the amounts for the March payroll to be made in the first week of April and for the April payroll reimbursements to be made at the end of April after the claim has been made. As the portal and the system for managing repayments have not been built yet these timeframes may shift. You may be able to access the business interruption loan to help with cashflow in the meantime.

Can I wait until I have received payment from the government before I pay my staff?

You will need to run the payroll as usual to claim the reimbursement. Our interpretation is that payments should still be made to staff as usual and the business interruption loan can be used if needed to cover these costs while waiting for reimbursement from the government. That being said, some employers (such as Wetherspoons) are going to hold back payment to staff until they receive reimbursement from the government.

Can my employees work while furloughed?

No.

Can my employees complete job-related training while furloughed?

Our current interpretation is that if the company is paying for the training or providing any resources to support the training then the answer would be no. However if the employee chooses to use the time for personal development, unsupported by the business, then this would be ok.

I'm a director of my own company. Can I furlough myself?

Whilst there is nothing explicit to say no, as a director it would be difficult to demonstrate that you are not working on the business at all during the furlough period.

Can I amend salaries and back-date this?

No.

I've taken on a new employee. Can I furlough them?

Only if they were on the payroll at 29.2.20.

Under furlough can I reduce peoples hours by a % and claim that back from the government?

No.

Can I furlough someone for a month, unfurlough them and then furlough them again?

It hasn't been explicitly stated but we anticipate this will not be allowed.

Does the 80% that the government will reimburse inclusive of Employers National Insurance and Pensions?

We don't know at this point

What can we do?

Please do give us a call if there is anything mentioned here that you want to find out more about or if you have questions not included in this list.

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