If your employer has been hard hit by the coronavirus crisis, find out how to claim 80 per cent of wages for at least three months as part of the government's Coronavirus Job Retention Scheme. The good news is that most UK employers are eligible for the scheme, including charities, small businesses, and even self-employed people (with some exceptions).
Keep reading to discover who is eligible and how the application should be made. Get more financial advice at our hub page.
Who is eligible for the Coronavirus Job Retention Scheme?
To be eligible for the Coronavirus Job Retention Scheme, an employer needs to furlough the workers that will be paid 80 per cent of their wages in this way. A furlough is basically unpaid leave, where your employer asks you to stop working and stops paying you without actually firing you.
To qualify, you will need to have been furloughed on or after 28 February 2020. If you were fired instead, ask your employer to re-hire and then furlough you. You aren't eligible if you were newly hired by your current company after 28 February.
If you're self-employed you still qualify, but you will need to show a tax return for 2019 in order to be eligible. The government is requiring this to stop people from quickly registering as self-employed in order to claim.
If you're a company director of your own business, you will need to furlough yourself and you won't be able to take on new work beyond minimum obligations to keep the business going (speak to your accountant for clarity).
How to claim 80% of wages?
Your employer will need to do this on your behalf via a government portal that will be open from the end of April. They will then receive an HMRC grant that will cover 80 per cent of all furloughed workers' wages, company NI contributions, and company minimum pension contributions. Claims can be back dated to the 1st March 2020. As an employee, you don't need to do anything if you've received a furlough notice from your company.
How long can I claim 80% wages?
The scheme is being rolled out for three months in the first instance, but will be reviewed depending on what happens with the coronavirus lockdown.
What if I'm sick?
The Job Retention Scheme is not designed to cover sick leave – in fact, employer will need to claim for a minimum three weeks. Instead, if you're sick beyond your company's sick cover, you will be eligible for Statutory Sick Pay.
What if I'm unemployed?
If you're unemployed, or you were furloughed before 28 February, you will need to apply for Universal Credit. The typical wait times are between three and five weeks, but you can apply for an emergency advance if you need money now.
- Difficulty paying your mortgage? Find out everything you need to know about mortgage holidays