Over the past few weeks and months, the Government have announced a number of additional measures to support both businesses and employers, but also to reduce the number of redundancies of employees that have been on Furlough. Also, we wanted to highlight some of the allowances available for employees working from home and to provide clarity on what happens if an employee has to self-isolate after travelling abroad.
We are providing an overview of some of these measures below.
Job Retention Bonus Scheme
- A £1,000 bonus will be paid to an employer for each employee brought back from furlough, including employees who were brought back from furlough before the Scheme was announced in July 2020.
Please note you can claim for all your furloughed employees but only if they meet the criteria outlined by the Government below:
- An employee must be continuously employed for a 3-month period throughout November 2020, December 2020 and January 2021. They must not be working their notice as of 31 January 2021. In effect, they have to still be in employment during February. This will be checked against RTI reports submitted to HM Revenue & Customs.
- Each employee must earn an average of at least £520 per month over the 3-month period.
The bonus payments will be paid from February 2021 onwards once the criteria have been adequately met.
Please note, on paper the Job Retention Bonus Scheme appears to be a generous allowance, but when you interrogate the numbers, in most cases it is going to cost an employer more to keep an employee on than the combination of the Coronavirus Job Retention Scheme and Job Retention Bonus Scheme grants will remit to your business.
A business will have to fully fund their employee November to February along with an increasing share of their wages for September 2020 and October 2020.
Example:
If an employee is earning £30,000 per annum and has been with your business for 4 years —
Cost of redundancy: Approximately £4,000
Cost of employment (after both grants are applied): Approximately £13,000.
Therefore, our suggestion would be to consider more than just the financial incentives before making a decision to retain staff.
Claims for Expenses for Working from Home
Many clients have contacted us after becoming aware of the allowances available for employees for working from home. This allowance is certainly not compulsory, but is worth consideration if your staff raise it.
This guidance can be found on the Government’s website using the link below:
https://www.gov.uk/tax-relief-for-employees/working-at-home.
Overview
From 6 April 2020 employers can pay up to £6 a week (£26 a month) to cover the additional costs associated with staff having to work from home. This can be processed along with payroll reports to HM Revenue & Customs under RTI.
Alternatively, staff can claim tax relief directly from HM Revenue & Customs of £6.00 by using form P87.
Tax Equivalent
For standard rate tax payers (20% tax) it is worth £1.20 per week.
For higher rate tax payers (40% tax) it is worth £2.40 per week.
For details relating to HM Revenue & Customs form P87, please follow the enclosed link:
https://www.gov.uk/guidance/claim-income-tax-relief-for-your-employment-expenses-p87
Pay While Self-Isolating After Travelling Abroad (Quarantine)
This is a situation for employers that has been brought on by the COVID-19 Pandemic, and the legislation is still in development. But currently the following applies:
- If someone has travelled on business, you have no option but to pay your staff.
- If someone has to quarantine after leisure travel but can work from home, then this is not an issue, you can pay them as normal.
- If someone books additional holiday (or unpaid leave) to cover their quarantine period, this is not an issue, you can pay them as normal.
- If the employee is not sick and unable to work remotely there is no entitlement to pay them — unless they entitled under contract or policy, which is unlikely.
As mentioned, this legislation may change, but should you have any questions please do not hesitate to contact a member of our team at White Hart Associates on 0208 878 8383.
