April 2020 – Impact of Coronavirus Pandemic

03/04/2020

In these unprecedented and constantly evolving times, we thought it would be helpful to pull together information about many of the temporary measures now in force (or likely to be introduced) either as a result of the Coronavirus Act 2020 (effective from the 31 March 2020) or the response to other significant issues.

Employer Subsidy - The government has issued guidance in relation to the Coronavirus Job Retention Scheme.

The guidance advises that the new scheme which enables all employers to claim for 80 per cent of the usual monthly wage costs of furloughed employees (employees on a leave of absence) up to £2,500 is expected to be up and running by the end of April 2020 and that all furloughed employees are covered if on a  PAYE payroll on 28 February 2020 including those working for charities, recruitment agencies (agency workers paid through PAYE), public authorities and those on flexible or zero-hour contracts.

The new guidance advises that employers are eligible for the subsidy for a particular employee only if the employee does not undertake work for or on behalf of the organisation. If an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for the scheme.

 Other elements of the scheme include:

 Employees placed on unpaid leave prior to 28 February 2020 cannot be furloughed

Employers need to write to their employee confirming that they have been furloughed and keep a record in order to be able to claim a subsidy

 For employees whose pay varies, or who have just started work, calculation of pay varies according to how long they have been employed, including by averaging over the 2019/2020 tax year or pro-rata calculations

 Employees on sick leave or self-isolating should get statutory sick pay, but can be furloughed after this

 Employees that have more than one employer can be furloughed for each job and the 80 per cent wage cap applies to each employer individually

 A furloughed employee can take part in volunteer work or training, as long as they do not provide services to or generate revenue for, or on behalf of the organisation and

 Normal rules apply if an employee is eligible for statutory maternity pay or maternity allowance, and they will be entitled to claim up to 39 weeks of statutory pay or allowance (with the same principles applying where an employee qualifies for contractual adoption, paternity or shared parental pay)

Self Employment -The Chancellor has announced a new self-employment income support scheme for those affected by the coronavirus outbreak. The scheme will provide a grant to self-employed individuals or partnerships, worth 80 per cent of average monthly profits over the last 3 years, up to £2,500 a month.

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