Covid-19 Business Support (Part 2) – Paying Employees

Nobody could have planned for what the UK business community is experiencing during this coronavirus outbreak

There have been so many emergency provisions announced by the government over the last week to try and provide financial support to UK businesses, to ease cash-flow, pay employees, contribute towards property costs and finally some help for the self-employed businesses who find themselves unable to generate enough income as a result of the shut down.

In the second part of a series of posts we have summarised below what is available to help businesses to pay their employees throughout the shutdown period:

Whilst the basics still apply to the information below, read our updated post here to see the changes made in Autumn 2020

Statutory Sick Pay Rebate for Employers

  • What support is available?

The Government will bring forward legislation to allow small and medium-sized businesses to reclaim Statutory Sick Pay (SSP) paid for staff sickness absence due to coronavirus. This refund will cover up to 2 weeks’ SSP, per eligible employee, who has been off work because of coronavirus. This means if the employee has been unable to work due to having the symptoms of coronavirus themselves or have been required to self-isolate as they live with someone that has symptoms.

  • What do I need to do?

A rebate scheme is being developed. Further details will be provided in due course.

  • Our thoughts

Ordinarily an employee would need to present a doctor’s note to support a SSP claim, however in the case of sickness due to coronavirus, this would not necessarily be an option, so we would recommend that you ask them to obtain an isolation note from NHS 111 Online (httpss://111.nhs.uk/covid-19) or the NHS website (httpss://www.nhs.uk/conditions/coronavirus-covid-19/self-isolation-advice/)

Coronavirus Jobs Retention Scheme

  • What support is available?

Under the Coronavirus Job Retention Scheme, all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis. This applies to employees who have been asked to stop working, but who are being kept on the payroll, otherwise described as ‘furloughed workers’.

HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant. The Coronavirus Job Retention Scheme will cover the cost of wages backdated to March 1st and is initially open for 3 months but will be extended if necessary.

  • What do I need to do?
  1. 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.
  2. Once the new online portal is live, submit information to HMRC about the employees that have been furloughed and their earnings (HMRC will set out further details on the information required). If we do your payroll we will support you with this
  • Our thoughts

This measure is primarily aimed at supporting businesses that have employees that would have been let go but have been retained on the books.

HMRC are working urgently to set up a system for reimbursement. They are expecting the first grants to be paid within weeks and are aiming to get it done before the end of April. This means that wages/salaries that are due now (i.e. for March month-end) will need to be funded from existing cash reserves, or potentially from a business interruption loan which are available to apply for now.

The assistance includes the cost of employers NIC and pension contributions.

If anything you have read here has raised more questions, please feel free to give us a call on 0191 2460747 to see how we can help you.

If anything you have read here has raised more questions, please feel free to contact us to see how we can help.