UK's Coronavirus Job Retention Scheme opens for applications - here's how it works

A Government scheme to support businesses and help safeguard jobs in the wake of the coronavirus pandemic has opened for applications.

The Coronavirus Job Retention Scheme went live this morning with businesses able to claim towards staff wages.

The launch of the scheme comes as the Government was warned of the economic cost for many companies of any delay in its implementation.

Here are your questions about the scheme answered.

Phone lines and web-chat services will be available to help answer applicants’ questions.

What is furlough?

If you are furloughed then your employer is keeping you on the payroll while a business has less work than normal.

While on furlough you cannot undertake work for or on behalf of your employer.

Many shops, restaurants, hotels and other service industries in the UK have found themselves with no customers after being forced to close amid the pandemic, and many other firms have had work cancelled.

Who is eligible?

Any UK organisation with employees can apply for the Government help as long as they had set up a payroll scheme before February 28.

This means that people who work for businesses, charities and public authorities will be entitled to the money if their employer signs up.

If you started your job after February 28 2020 then you are not eligible for the scheme.

If you were made redundant since February 28, you can be put on furlough if your employer rehires you.

How much will I get paid?

Businesses will be able to pay their employees 80% of their regular monthly wage, or £2,500 a month, whichever is lower.

If on the scheme, your employer must pay you at least the 80% of your usual income, however they are also free to top this up if they wish.

This means that if you earn £24,000 a year, you will earn a gross income of at least £1,600 a month on the furlough scheme.

How long will it last?

The Coronavirus Job Retention Scheme was originally intended to run to June 1 2020, however it has been extended until at least the end of that month.

In a statement, Chancellor Rishi Sunak said: “Our unprecedented job retention scheme will protect millions of jobs across the country and is now up and running.

“It’s vital that our economy gets up and running again as soon as it’s safe – and this scheme will allow that to happen.”

How have businesses and trade unions reacted?

The two groups have broadly welcomed the scheme and its extension.

Trade bodies and business groups said the Government must ensure speedy access to the funds so staff can be paid.

Unions said there would be “no reason” for redundancies and called on ministers to ensure workers are protected longer-term during a recovery.

Who will run the scheme?

Treasury said in a statement that about 5,000 HMRC staff will work on the project, which is intended to assist thousands of UK firms, with the money due to reach bank accounts within six working days.

Phone lines and web-chat services will be available to help answer applicants’ questions, with the scheme launching 10 days ahead of schedule, it added.

Do I still get taxed?

While on furlough your wage will be subject to the usual income tax and other deductions, the Government guidance says.

What are my rights?

According to HM Revenue and Customs (HMRC) furloughed employees have exactly the same rights they did when working.

This means you are still entitled to statutory sick pay, maternity and other parental rights, the right against unfair dismissal and redundancy payments should you lose your job.

What if I do not want to go on furlough?

The Government say you may be at risk of losing your job if your employer asks you to go on furlough and you refuse.

If this is the case, it must be in line with normal redundancy rules and protections.