Extension to government coronavirus furlough scheme ‘will be a godsend to employers who tried to do the right thing’

April 16, 2020

THE decision to extend the government’s Coronavirus Job Retention Scheme so business can furlough employees who joined them as late as March 19 has been hailed as a ‘godsend’ by a leading accountant.

Paul Hornby says many companies have tried to do the right thing by keeping on staff who otherwise would have been left jobless and penniless.

But that has led to them taking a financial hit at a time when they are already struggling to make ends meet in light of the economic impact of Covid-19.

Paul, whose Ulverston-based firm, JF Hornby and Co has twice been named UK Accountants of the Year, said: “Many businesses were left in an impossible position. Staff they had recently employed - after February 28 - were in many cases surplus to requirements, but because of the original rules relating to furlough did not qualify.

“So business owners were faced with a tough choice; support these staff at a time when they could ill afford to do so or let them go knowing they may well suffer financial hardship as a result.

“I have spoken to many business owners for whom the former was the choice they made. The extension of these rules will come as a godsend to them as it gives them an option, should they so wish to now furlough those staff.”

Under the scheme announced by Chancellor Rishi Sunak last month, employers can claim a grant covering 80 per cent of the wages for a furloughed employee, subject to a cap of £2,500 a month.

To qualify and to protect against fraudulent claims, individuals originally had to be employed on February 28 2020.

But following a review of the delivery system new guidance published today (Wednesday April 15) has confirmed the eligibility date has been extended to March 19 2020– the day before the scheme was announced.

Employers can claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020.

This means that the employee must have been notified to HMRC through an RTI submission notifying payment in respect of that employee on or before 19 March 2020. This change is expected to benefit over 200,000 employees.

The HMRC scheme is due to be fully operational next week, while

Paul, who earlier this week issued a Covid-19 to-do list for businesses, said: “This is the right decision. So many of those people affected by the original cutoff point had simply moved from one full time job to another and were being unfairly penalised. This redresses the balance and will no doubt end sleepless nights for many people.”

If any employer now thinks they are eligible for support, they can find out more here.

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