Bookkeeping Bites – To Furlough, or Not To Furlough, That is the Question

So, just to keep us up to date on this new, much heard term. There has been some movement on FURLOUGHED WORKERS in the Corona Job Retention Scheme…..

The headlines are still the same for percentages and concepts… The new stuff is around dates & application methods, so here goes:

  • The funding will be open to all employers with a PAYE payroll scheme that was created and started on or before 28 February 2020, including charities
  • The scheme will cover the cost of wages backdated to 1 March 2020, if applicable.
  • The Government are aiming to have the scheme up and running by the end of April 2020
  • Businesses will be able to apply via an online portal – size, shape and functionality still to be disclosed

There has also been some extension on the amount being offered… OK, so we are still at that £2500 ceiling, but now it is clear this is PLUS the associated Employers NI and minimum Employers Pension.. Get the feeling this is an extra carrot being dangled your way??

“Yes, you can. Oh, wait, no, you can’t”

We are starting to hear murmurings of a change of line on Directors and whether they can be furloughed…….  It seems the Government have kind of said “Yes, you can, but actually, no, you can’t’…..

Why? Well, yes, it seems you may be able to be furloughed as a Director, and continue to do some work….. if you can honestly say that the work you are doing is NOT GENERATING INCOME…….. Huh, now sure how many Directors can actually say that…. And on the flip side, how would HMRC prove the work you are doing is not generating income… So, there was your ‘no’ bit.

Yesterday, there was a line that if Directors agree to contact your customers, suppliers and business contacts that your business is suspended during the Corona Virus., then yes, you can furlough…….

You can see just from this one example, how much tooing and froing there is still to be done to iron this one out. Clear cut? I don’t think so.

We don’t expect this one to go away, watch this space for more developments.

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