Guidance for landlords and tenants

Ban on rental evictions

The Government has announced the suspension of evictions from social or private rented accommodation will be extended by 2 months. New court rules will “ensure vulnerable renters will be protected when the suspension of evictions

Coronavirus Job Retention Scheme (Furlough Scheme) Frequently Asked Questions

You may also find this recorded webinar helpful, ‘Coronavirus (COVID-19) Job Retention Scheme‘, available on HMRC’s YouTube channel.

To summarise when making a claim you need to follow the following steps:

  • Get agreement in writing from staff to be furloughed and the date this is to apply from and if you will be making up the difference between the grant you can claim and their usual wages . To be eligible they have to have been on payroll at 28 February 2020.
  • For salaried employees the grant enables you to claim 80% of their wages processed at 28 February 2020, up-to a maximum of £2,500 a month. They have to be furloughed for at least 3 weeks to be able to claim.
  • If their pay varies you can claim back 80% of the higher of either:
    • Their salary for the same month in the previous year
    • Their average monthly pay for the 2019/2020 tax year
  • When you have worked out what salary you can claim for you must then work out the Employers National Insurance you can claim and the auto enrolment pension (if they pay into this) you can claim (this is limited to the 3% employers payment)
  • When you have summarised the above for each employee to calculated you total claim, you can log onto the HMRC portal (this should be available from the end of April) to make the claim. For this you will need:
    • Your PAYE number
    • The number of employees furloughed for the period of claim
    • The start and end date of the claim period
    • The amount claimed, this is for a minimum furloughing period of 3 weeks
    • Your bank account number and sort code
    • Your contact name
    • Your phone number

1. What is the Scheme and for how long will it be open?  

The Scheme is for employees who were on the payroll as at 28 February 2020. 

The Scheme will initially be open for a minimum of 3 months but may be extended for longer if required. There is no limit on the amount of funding available for the Scheme. The Scheme provides for grants to employers to be paid to workers furloughed for at least three weeks because there is no work for them or their employer is unable to operate due to coronavirus. Grants will represent 80% of furloughed employees wages, capped at £2,500 per month, plus employer’s NIC and minimum pension payments (see point 5), on these amounts.  

2. What is covered under wages?  

For employees where their pay does not vary, this is their actual salary before tax excluding fees, commission and bonusas of 28 February 2020. For those whose pay varies, it is the earnings in the same pay period in the previous year; or the average earnings in the 2019-2020 tax year (or fewer if they have worked for less time that this, including a part time calculation if they were taken on in February) whichever is the higher, excluding fees, commission and bonus.  

3. How can an employer claim?  

The Government is setting up an online portal via HMRC which is due to be operational by the end of April. Employers will need to self-certify that they have furloughed employees. It is strongly recommended employers maintain a paper trail and spreadsheet calculation to evidence this in case it is asked for later.  

In order to make a claim, you will need the following: • Your ePAYE reference number • The number of employees being furloughed • The claim period (start and end date) • Amount claimed (per the minimum length of furloughing of 3 weeks) • Your bank account number and sort code • Your contact name • Your phone number 

4. Is this a loan and are payments taxable?  

No, it is a grant and does not need to be repaid.  

Payments received by an employer are made to offset deductible revenue costs. Payments must therefore be included as income in your calculation of taxable profits for income tax and corporation tax purposes, in accordance with normal principles. Employment costs may be deducted as normal when calculating taxable profits for income tax and corporation tax purposes.  

5. What about Employer NI and employer pension contributions? 

Employers will still have to pay the 13.8% NI but will be able to claim this back as well. Pension contributions will still need to be made, but employers may agree with the employee to have a pension break so that the employee is not making their contribution and neither is the employer. Minimum auto enrolment employer contributions of 3% can be claimed back.  

6. Do employees have to agree to being furloughed?  

It depends on your employment contract. If there is a clause in the contract that allows you to “lay off” employees, then you do not need your employee’s consent. If you do not have such a clause, then you will need employee agreement to vary their contract.  

It is important to note that if employers intend varying the contracts of 20 or more employees at one establishment, then collective consultation rules apply and the employer will have to consult with recognised unions or if there are none, elected representatives. Form HR1 will need to be filled in and filed. As redundancies aren’t being made at this stage, an employer will not need to wait for 30 days before furloughing employees.  

7. What if an employee does not agree to be furloughed?  

If an employee does not agree, then the employer will need to proceed with a redundancy process. The usual procedures will need to be followed, including considering all alternatives to redundancy before making a final decision.  

8. What about employees taken on after 1 March?  

They are excluded from the Scheme. 

9. To qualify, does the business need to be ‘essential’?  

No. All businesses which employ and pay workers through the PAYE system are eligible.  

10. Can an employer top this up from 80%?  

Yes. In order to qualify for the Scheme, employers must pay their staff at least 80% of wages, up to the cap of £2,500 per month. It is up to them if they wish to top up the additional 20 per cent.  

11. What about employees that have already been made redundant?  

The Scheme will be back dated to March 1 with a view to covering those who have already been made redundant due to the Coronavirus outbreak.  If firms re-employ staff made redundant after March 1st, they are eligible to then be furloughed and the employer would qualify for the grant.  

12. Can an employer make someone redundant on the Furlough Scheme? 

Yes, employees can still be made redundant while on furlough or immediately after. There is no requirement to bring the employee back to work after the period of furlough. If an employee is made redundant during the period of furlough then grant payments will cease.  

However, in both cases normal redundancy rules and protections will apply. Where a business feels that redundancy is the only option, this must still follow the rules which include giving a notice period and consulting staff before a final decision is reached. 

13. Can an employee be furloughed for a short period of time and then be brought back into the workplace?   

A worker must be furloughed for a minimum period of 3 weeks for their employer to be eligible to claim under this scheme.  

14. Can an employee volunteer or do training whilst furloughed?  

Employees cannot work for you whilst they are furloughed.  

They can volunteer or train, provided that this does not involve generating income of providing a service to you. If they are doing on-line training, they must be paid the minimum wage.  

15. Can those who are on long term sick leave be put on the Scheme? 

No, they cannot. Changing someone from long term sick to on the Furlough Scheme would be deemed as fraudulent.  

16. Can those on maternity leave be put on the Scheme? 

Employees are required to give a minimum of 8 weeks’ notice to end their maternity leave and come back to work earlier than intended. Maternity returners can only be put on the Scheme when they are ready to return to work.  

Those about to go on maternity leave can be put on the Scheme and then their status will change once maternity leave commences.  

17. Can those on the Scheme take holiday? 

Holidays accrue at the normal rate whilst an employee is furloughed. However, once they are furloughed, they cannot be on the Scheme and then come off to take holiday (paid at the full rate) and then go back.  

Coronavirus Job Retention Scheme – Guidance for furloughing employees

Update 23 June 2020

HMRC has now released details of the Flexible Furlough Scheme which starts on 1 July 2020.

Under the Flexible Furlough Scheme, employees no longer need to avoid doing any work for their employer, but can work for some of the week and be furloughed for the rest. The proportions are to be decided between the employer and employee.

The most significant change is that the minimum three week period for furlough has been removed, as of 1 July 2020.  There is no minimum period from that date, although any claim via the CJRS portal must be in respect of a minimum one week period (i.e. employers can only submit four claims per month, not one every day)

The rules will change again from 1 August when no pension costs or employer’s NIC will be reclaimable. In September and October, the amount of wages which can be claimed will also reduce.

Claim periods

There is effectively a new CJRS in place for furlough periods from 1 July 2020. Furlough periods that straddle 1 July are treated as ending on 30 June 2020 and then restart under the new scheme on 1 July. Two separate claims will be needed for such straddling furloughs, with furlough days up to 30 June 2020 to be included in the June claim.

Claims under the existing CJRS scheme must be made by 31 July. Claims under the new CJRS cannot be made until 1 July.

If an employer wishes to claim for furlough periods in both June and July, they must make two separate claims for the June furlough and the July furlough. However, claims for furlough periods completed up to 30 June should be submitted before any claims made in respect of periods from 1 July 2020. This is because of the maximum numbers rule (see below).

Under both the new and old CJRS, claims cannot be made more than 14 days before the end date of the claim, so claims with an end date of 31 July cannot be made until 18 July.

Only one claim per PAYE scheme is permitted, which must include all pay frequencies.

No straddling of months

Claims must start and end within the same calendar month because the rules are changing from the beginning of each month. Also claim periods cannot be shorter than a week.

Who can be in a claim from 1 July?

An employee can only be included in the claim from the 1 July if they had been furloughed for a minimum of 21 days at any point between 1 March 2020 to 30 June 2020.

Furlough periods

Any furlough periods up to 30 June must last at least 21 days, but those periods can be extended by any number of days. However, where an employee resumes work and then starts a new furlough period, that new furlough period must be at least 21 days.

To qualify for a claim for flexible furlough under the new CJRS, employees must have been furloughed for at least 21 days. If the employee begins a new furlough period after 10 June, they must complete a period of at least 21 days on furlough, before moving on to a flexible furlough arrangement. Any CJRS claim which straddles 30 June must be split into two to cover the June days and the July days in of the furlough period.

Maximum numbers

HMRC will validate the number of employees that can be claimed for. This must not exceed the highest number of employees that were in any claim up to and including 30 June 2020.

There are exceptions for:

  • employees returning from parental leave who had not been included in a claim up to the 30 June.
  • employees who have been moved to a new PAYE scheme as a result of a scheme reorganisation after 10 June, but had been in a claim under their previous PAYE scheme between 1 March 2020 and 30 June 2020
  • employees transferred under the TUPE rules into a business due to a change of ownership or a compulsory liquidation after 10 June 2020, but who had been in a claim under their previous PAYE scheme between 1 March 2020 and 30 June 2020

Usual hours

From 1 July 2020, employees can work and be furloughed in the same pay period, and even on the same day. If employers want to take advantage of this flexibility they will have to calculate all of the following for the employee:

  • his or her ‘usual hours’
  • actual hours worked
  • furloughed hours worked

‘Usual hours’ are either:

  • Contracted hours for salaried employees  or Specific formula for zero hours or variably paid employees

In all calculations always round up to the next whole number of hours.

Furloughed hours

To calculate an employee’s furloughed hours, deduct the actual hours worked from the usual hours. Employers will be expected to report the worked hours and the usual hours in the CJRS claims portal. Only where there are 100 or more employees in a claim can the details be submitted on a spreadsheet.

The wage cap

The £2,500 wage cap continues to apply for July and August. This applies to each employment and is not aggregated, it is prorated to the hours in the pay period that the employee is furloughed, with this apportionment based on calendar days. The employer’s NIC threshold and pension threshold will also be apportioned.

Furlough scheme extended to end of October, with employers to share burden with government from August. (Issued 12 May 2020)

HMRC has advised that for employers to get their payments by 30 April they need to make a claim by midnight Wednesday 22 April as it takes six working days to process claims

The main clarifications this week so far have been as follows:

  • Director’s are able to be furloughed, but the necessary paperwork still needs to be in place. If furloughed, Director’s should not undertake any client facing work i.e. arranging to do sales work or publicity and marketing of the business, however they are able to keep the business ticking over and do administration work to comply with their statutory duties, like the following:
    • Preparation and Submission of Statutory Returns i.e. VAT Returns, Payroll submissions, Annual Accounts submissions, paying suppliers and chasing money owed, etc
  • HMRC have confirmed that those entitled to the self-employed grant scheme will be WRITTEN to in JUNE about this. There are a number of Scam emails and texts circulating about this asking for bank details to make payments, please do NOT give out these details as they will try and access your bank accounts to take money.
  • Confirmation that high street banks are not allowed to ask for security from directors against the 20% of a loan unsecured by the government, through their Coronavirus Business Interruption Scheme. 
  • The Covid-19 time to pay number for people and business struggling to pay Corporation Tax, PAYE, VAT or other taxes has changed to – 0800 024 1222
  • Local authorities have started contacting businesses who ae entitled to claim the £10k or £25k business rates grants in their areas and in some cases I am aware payments of the grant have been made. Each authority is operating differently, but the consensus seems to be they are contacting you and inviting you to apply via a link for the funds. They hope to have contacted the necessary businesses in April, however, if you believe you are entitled to it and have not heard from them you will need to contact them. Please be aware of any scams.
  • We have been notified that the Portal for reclaiming the Furloughed Staff Grant will be ready from 20 April 2020. This will be accessed via HMRC’s online gateway. More details on this will be released over the next few days.

The most recent updates (16 Apr 20) to the Furlough scheme are:

Qualifying Employers

To qualify, an employer must have a PAYE Scheme registered on HRMC’s real time information system for PAYE on 19th March 2020. This is a change from 28 February 2020. 

Employee Qualification Date

  • Employees that were on your PAYE payroll on or before 19 March 2020(changed from 28 February) and
  • Which were notified to HMRC on an RTI submission on or before 19 March 2020 and
  • An RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020

Whilst this may allow those employed between 28 February and 19 March to be furloughed, in practical terms this will make little difference. The reason is that for an RTI submission notifying payment to have been made in respect of a new employee, their pay day must have been very early in March and most pay days are at the end of March. Therefore exercise caution in trying to furlough anyone who joined your employment between 28 February and 19 March unless you have already notified HMRC of a payment to them.

Qualifying Workers

You must have instructed employees to cease working because of the coronavirus and they must have ceased work for at least 21 days and must have agreed in writing to be furloughed.  This can be an email – so if your employees have not responded following a letter advising of them being furloughed, you must ensure they do so now

Connected Employers

The revised HMRC guidance makes it clear that not only must a furloughed worker not work for someone else connected or associated with their employer, but they must not work indirectly for their employer either.

Company Directors 

Directors can fulfil a duty or other obligation arsing by or under an Act of Parliament in relation to the filing of company accounts or provision of other information relating to the administration of the Director’s Company. This permission is narrow and as said before you should not undertake any client facing or marketing work or it will invalidate a claim

Making a Claim

As you prepare to make a claim, please note:

  • the online claim service will be launched on GOV.UK on 20‌‌ April 2020 – please do not try to access it before this date as it won’t be available
  • the only way to make a claim is online – the service should be simple to use and any support you need available on GOV.UK; this will include help with calculating the amount you can claim
  • you can make the claim yourself even if you usually use an agent
  • claims will be paid within 6 working days; you should not contact us unless it is absolutely necessary – any queries should be directed to your agent or representative

Information you will need before you make a claim

In addition to the information above, you will need to have the following before 20‌‌ April 2020:

  • If your agent is not processing the claim for you via their online payroll system, a Government Gateway (GG) ID and password – if you don’t already have a GG account, you can apply for one online, or by going to GOV.UK and searching for ‘HMRC services: sign in or register’
  • be enrolled for PAYE online – if you aren’t registered yet, you can do so now, or by going to GOV.UK and searching for ‘PAYE Online for employers’

Guidance for landlords and renters

Help for the self employed – analysis of the measures announced by the Chancellor from the Institute of Fiscal Studies

Business Support FAQs

Further Buinesses and Premises to Close: Revised Guidance