Job Retention Scheme Phases
Job Retention Scheme Phases Discussed by Hayvenhursts Accountancy Services
The job retention scheme was quickly set up by the Government when it became apparent that lockdown measures needed to be put in place in the UK when Coronavirus was declared a Pandemic. The scheme was set up to ensure that businesses in the UK who couldn’t continue to trade during the UK’s strict lockdown were able to continue to employ their staff meaning millions of people wouldn’t lose their jobs and would be able to survive financially during these testing times. The scheme has also protected businesses from additional financial strain in the hope they can start trading again as lockdown measures are being eased.
What is Furlough or the UK Governments Job Retention Scheme?
The UK’s job retention scheme, also known as furlough generally means temporary leave from work. Staff remain employed but do not undertake any work during the time they are paid through the scheme. Until this point the word hasn’t ever really meant anything in regards to UK employment law and the term is generally used in the USA. In response to the Coronavirus Pandemic outbreak, furlough has been temporarily introduced in the UK. This hasn’t changed anything in regards to employment law, however the furlough scheme adds to it at this time.
Furlough leave provides employers and businesses with an option to keep their employees on their payroll without them working, or working reduced hours in response to the unprecedented situation we face from the COVID-19 Pandemic. The furlough scheme prevents people from being made redundant, laid off, or employers or businesses having to pay their staff when they have no income due to UK’s Coronavirus lockdown measures.
What are the financial implications of the UK’s Furlough Scheme?
According to a survey published by the British Chamber of Commerce, two-thirds of British businesses have used the government’s furlough scheme since it was announced, and one in three companies have put at least 75 percent of their workforce onto the scheme.
The Office for Budget Responsibility has estimated that the cost of furloughing workers during the Coronavirus Pandemic would reach £42 billion, however, this was estimated before the government communicated they were extending the scheme.
How much does Furlough or the UK Governments Job Retention Scheme pay?
Under the UK’s furlough scheme rules the government will pay up to 80 percent of a person’s wages, but up to a maximum of £2,500 a month. Any person working in a full-time job, or on a PAYE basis on 19th March 2020 can be furloughed as long as they were employed, or on payroll on 28th February 2020. The scheme includes zero-hours contracts, or for those people who work flexibly.
Furlough is much like gardening leave; you are paid by your employer and you still pay tax and NI from your paid income, you are not allowed to carry out any work for your employer whilst you are on the scheme and your employer is able to claim up to 80% of your wages back from the government. Some businesses are paying more than 80% of a person’s salary but this is discretionary and it is their financial responsibility to pay anything over the 80% or the cap of £2,500.
On Friday 29th May 2020, the Chancellor gave details of how the UK’s furlough, job retention scheme would look and has now confirmed it will continue to the end of October 2020. Phase 1 ends on the 30th June 2020 and phase 2 is the gradual easing of lockdown which enables businesses to reopen and this phase of the scheme will run from the 1st July to 31st October 2020.
From 1st July 2020, employers in the UK will have the ability to bring their employees back to work on a full or part-time basis. Employers will pay their employees for the days or hours that they work and the Government will pay the remainder of their salary up to 80%, or up to the capped rate of £2,500. Employers can only claim for a minimum period of a week.
Employees must have been in the Phase 1 scheme as of 30th June 2020 to be eligible, meaning an employee must have been entered into the Phase 1 scheme before 10th June 2020. This allows for the 3 week qualification period before furlough can be ended, or amended. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full 3 week period prior to 30th June 2020. Employers will have until 31 July to make any claims in respect of the period up to 30th June 2020.
Phase 3 & Onwards
The UK Government Furlough Scheme will be phased out gradually between now and the 31st October 2020 to support businesses as they reopen and get back on their feet:
- 1st August 2020 – employers will pay all employer national insurance and pension costs (including the furloughed days)
- 1st September 2020 – in addition to the above, employers will also contribute to 10% of salaries, for the furlough days. This means the Government will pay 70% for the furlough days which is capped at £2,187.50
- 1st October 2020 – in addition to the above, employers will now contribute to 20% of salaries for furlough days. This means the Government will pay 60% for the furlough days which is capped at £1,875
- The furlough scheme will close on 31st October 2020
What are the practical things you need to think about and consider when re-opening your business over the next weeks and months?
Many businesses and local services are now planning how they can adapt to enable them to reopen again when the government’s lockdown measures are easing for businesses. Local and non-essential shops will be able to reopen as of 15th June 2020 as long as they have carried out the necessary Health & Safety risk assessments and ensure they implement the 2 metre social distancing rules for both staff and customers. Other businesses and services such as beauty salons and hairdressers are planning to reopen as of 4th July 2020, however, this is dependent on the UK’s R rate and deaths from coronavirus continuing to decrease in line with expectations.
Every business owner and, or manager has the responsibility to ensure their staff and customers are safe when they reopen again and this includes; social distancing measures, policies and procedures for both staff and customers.
No businesses are going to be able to reopen and operate in the same way as they did prior to the Coronavirus Pandemic and no one really knows how long this will go on for, therefore, the most viable option for you as a business is to plan how it will work now within the new guidelines.
The new government rules mean you will have to vigorously assess your workplace and business and make decisions on how you will adapt your environment and procedures to ensure you can work safely, protecting your staff and customers, and minimising the spread of Coronavirus at all times.
The government has published guidelines for how you can make your workplace as safe as possible when you reopen and this information and guidance is critical to ensure we continue to slow the spread as well as allowing the country’s economy to get back up and running.
Details of the Government’s Guidance can be found here.
The Government’s Help and Advice for The 5 Steps to Working Safely during Coronavirus (COVID-19) can be found here.
Summary of the Guidance:
- Work spaces and areas should be designed to allow 2-metre distancing for both staff and customers
- Start times should be staggered where possible to support social distancing
- Staff bubbles should be implemented to ensure minimal contact between staff members
- One-way walking systems should be in place if walkways don’t allow for 2 metre distancing
- Consider opening more entrance and exit points for staff and customers if this is an option for you
- Change the layout of rest areas or close them if 2 metre social distancing cannot be adhered to
- Provide additional washing facilities for staff if you have the option to
- Have hand sanitizer available at entry and exit points and in suitable places around your workplace or retail unit
- Implement frequent deep cleaning practices and policies with regular audit checks in place
The FSB has lots of support and information available to businesses planning to reopen and has published COVID-19: Practical guidance for businesses will be key to reopening the economy safely which can be found here.
Remodelling your Office or Retail Space
If you are having to think about redesigning or remodelling your whole office or retail area then think about how you can make the most of every space and area in your business. Think about desk positions, storage, shelving and electric points when you are doing this and arrange for an electrician or carpenter to come in and help you with your plans if you need to. Think if there is any possibility of you adding additional hand washing facilities within your space and ask a plumber to review if this is possible. Do you need to implement a one way system within any areas of your space and will you need to block certain access points off to enable this. It’s easier to brief staff on any changes you are implementing compared to customers if you are a customer facing business so also think about signs that you can put up to provide clear instructions for 2 metre social distancing rules, hand sanitizing, entry, exit points and one way systems.
Moving Fixed Desks & Creating Additional Desks or Workstations
If you already have fixed desks within your office or space then you may need to move them and, or add to them to ensure they are 2 metres apart to abide by the government’s social distancing guidelines. The government are advising that for any businesses that can no longer fully operate with staff working from home that you should use screens or barriers to separate staff and customers from each other, use back-to-back or side-to-side working options instead of face-to-face, and whenever possible reduce the number of people each person has contact with by using ‘fixed teams or partnering’ to ensure every staff member only works with a select few within your business.
Additional Seating Areas
If you have a reception area you should think how you can rearrange it to ensure customers can adhere to the 2-metre social distancing rule. Also decide if you need to create additional seating areas with barriers or partition walls if they are essential for your business to operate effectively to ensure your business can reopen and operate safely.
Electrical Points & Sockets
With any changes to an office, retail or working area you will nearly always need additional electric points or sockets and you will need a fully qualified electrician to do this for you.
Till & Payment Points
Whether you are a small retail unit or a larger retail outlet you will need to consider if you need to relocate your payment/till points, or add additional ones to enable you to operate effectively whilst adhering to the 2 metre social distancing rules.
Screens or Barriers or Partition Walls
The government is advising that you install safe and secure perspex screens or barriers at till and payment areas to help to keep your staff and customers safe. Screens and barriers will be common now for most service businesses at least and there are lots of businesses out there now that can help to supply and fit these securely and professionally for you. They ensure your business can reopen safely and enable you to take payments through a small opening in the screen so there is minimal contact.
Moving or Creating Larger Meeting Areas
If you have small meeting areas in which you cannot adhere to the 2-metre distancing rules then you should think about creating new areas or expanding existing ones if they are essential to your business operating, or close them off completely.
Additional Washing Areas and Facilities Including Hand Driers
If your Health & Safety Risk Assessment shows you now need additional washing facilities for your office or retail unit then you should ask a qualified plumber and carpenter to visit your premises to see if this is an option.
One Way, Hand Washing, Information and Directional Signs
Staff and customers will all now need to be aware of their responsibility when your office or retail area reopens and this is easier with staff as they can be briefed and monitored to ensure any new processes are being followed. This however, is more difficult when it comes to customers therefore introducing clear information and instruction signs where you need them both inside and out will be essential when you reopen your business.
Social Distancing Floor Markers
Permanent or temporary floor markings to accurately highlight 2 metres is now essential both inside and outside of your business to support and be clear for customers when they are queuing. Think about how you can do this ensuring it looks professional and will last the test of time.
Entry or Exit Points
You may find that opening up previously closed off entry or exit doors will help your business accommodate more customers and if this is an option for you and you think it will help to ensure you, your team and staff are able to adhere to social distancing rules then you should consider the cost of doing this, versus the benefit your business will see from it.
All of the above will come at a cost to your business and you should make your plans, prepare a budget for the changes you will need to make and work this into your annual budget and business plans. At Hayvenhursts we can help you to rework your short and long term business plans and review them with you offering you support and advice as it progresses..
Forward thinking and planning for your business will be crucial to you surviving the COVID19 Pandemic. Businesses now need to think on their feet and adapt their services, therefore, taking time away to evaluate where you are, where you need to be, what you can change and what you can do in this changing world is absolutely vital.
Hayvenhursts Advice & Recommendations
- Take your time to evaluate and break down each of your services and products
- Ask yourself if you need to add products and services to meet the needs of your customers now, and in the short and long term
- Think about how can you change your services to meet the needs of your customers now, and in the short and long term
- Decide and agree how you can adapt your business premises and staff processes to enable you to operate safely and reopen in line with the new government guidelines. Ask for staff input and ask for support from other businesses as an external view will help you to think outside of the box and have new ideas
- Speak to your suppliers to agree how things can work for you and them moving forward
- Speak to the local businesses around you to see how their business plans are going and what their timescales and strategic plans are
- If you are renting a commercial property speak with your landlord regularly to agree rental plans which will work for you both, now and moving forward
- Ensure you have a good accountancy service like Hayvenhursts who will work with you to plan your business finances, help you to produce a business plan for the short and long term and be someone who you can rely on at this difficult financial time. They will have the skills and expertise to understand what is happening in your business and the economy and be able to put together a realistic, achievable and robust financial business plan with you
About Hayvenhurst Accountancy Services
At Hayvenhursts we are experts in all types of accountancy services and can help you and your business at this difficult time.
We don’t just offer a standard accountancy service, we get to know you and your business and will work alongside you to ensure your business has all the accountancy and expert business services that you need now and in the future.
Our highly trained, experienced and expert team members will understand your business sector, you and your needs at this time which results in us providing a service which is individual to you. We will work alongside you to identify savings, tax breaks, improved cash flow and business efficiency through our defined and relevant accountancy and business services, establishing savings and opportunities which will improve your business’s short and long term financials.
Contact us today and find out how we can help you at this uncertain time and how we can help you to futureproof your business.
Hayvenhurst Accountants COVID-19 STATEMENT
We have been carefully observing the development of the spread, Government advice and information and media surrounding the spread of the Covid-19 virus.
To protect our staff, clients and other contacts we would like to issue the following advice;
We would like to reassure our clients that it is business as usual at Haybenhursts offices. Our staff currently continue to work as normal. We are preparing for all eventualities and keeping the situation under constant review. We have plans in place to introduce different working arrangements should the need arise.
The wellbeing of our staff and clients remains our priority and we have put in place reasonable and proportionate arrangements to protect our colleagues and clients. These include:-
- Clients are advised not to attend our offices, if not essential. Instead, we will arrange telephone or video conferences online
- Elderly and vulnerable clients should not attend our offices at all
- Home or office visits will only be made if urgent and assessed on a case by case basis
As a valued member of our community, we appreciate the trust you place in us to make sure all your critical services continue.
We are committed to an evidence-led and common-sense approach to containing the coronavirus outbreak and mitigating its impact on employees, customers and our wider business operations.
We have business continuity plans in place to minimise the risk of infection and make sure we can continue to deliver a business-as-usual service to our customers should an infection occur at an office. These include implementing clear guidelines for employees, providing support and advice for anyone who needs to self-quarantine, and issuing guidance on following safe hygiene practices across the organisation.