COVID-19 Coronavirus Job Retention Scheme Cut-Off Date Extended to 19th March

HM Treasury announced last night that the eligibility cut-off date for Coronavirus Job Retention Scheme has been extended to the 9th March 2020 from the original date of the 28th February 2020.
 
However, the employee simply being employed on that date is not enough.  To be eligible as a furloughed employee, the employee needs to both be employed and on the business PAYE payroll on or before 19th March 2020.  This was the day before the Coronavirus Job Retention Scheme was announced.
 
In practice this means the business would need to have notified HMRC through an RTI submission.
 
Whilst this will potentially open the scheme to some weekly and fortnightly paid staff, the Treasury estimate that the change is expected to benefit over 200,000 employees seems optimistic.
 
The reality is that most businesses run their payroll between the 25th and the last day of the month.  As a result, anyone who started working for a company at the beginning of March and is on a monthly salary is still outside the scope of the scheme.
 
HMRC need(s) to have adequate measures in place to prevent fraud and one of the checks will be to see if there has been a PAYE payroll previously submitted for a furloughed employee. 
 
However, this is leaving a tranche of employees disadvantaged merely from accepting and starting a new job in many cases agreed months beforehand.  The HMRC solution of asking their previous employer to reinstate them on their payroll is incredulous and there needs to be a more nuanced solution.
 
As well as the recently employed, there are other groups currently falling through the cracks and left with no support – start-up businesses, the recently self-employed, the self-employed with annual earnings of more than £50,000 a year and company directors paid by dividends.
 
The Telegraph is reporting today that the Treasury is expected to unveil an extensive rescue package for start-up businesses within the next few days.
 
In addition, there is mounting pressure on the Treasury to support the other groups many of whom now have no income.  As Mike Cherry, national chairman of The Federation of Small Businesses, stated those who are not being helped include “hard-working people who have built up successful businesses and paid taxes all their lives”.
 
At CooperFaure, we understand the profound impact of COVID-19 on businesses from our conversations both with clients and others that have reached out at this time of need.  Now is the time for the government to consider new and innovative routes of immediate support in terms of direct cash payments into businesses.

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We will continue to report any developments as they come through.  In the meantime, please email support@cooperfaure.co.uk if you have any questions or would like any other information.