Accountancy firm RDP Newmans is warning that hundreds of local businesses may still have to lay off or sack staff due to a loophole in the Governments Coronavirus Job Retention Scheme (CJRS).
The South East-based firm has said that the CJRS will allow most staff to be furloughed, but warned that a small percentage of those who recently took up a job after 28 February will not benefit from the scheme, leaving their employers with little option but to lay them off to cut costs.
Paresh Radia, Managing Partner at RDP Newmans, said that the scheme would be open to all furloughed workers, defined as those who remain on the payroll, but who otherwise would be laid off.
“Unfortunately, due to the way that the Government and HM Revenue & Customs has chosen to apply this scheme, by basing the payments of these grants on those included on a business’s payroll at the end of February, there are going to be some new staff members who are unable to be furloughed and make use of this funding,” explained Paresh.
“Depending on the needs of their employer, they may need to be laid off or they may have their position terminated if they are on a probationary period and outside of the employment protections offered to employees after working at an organisation for two years.”
Paresh said that the number of affected workers was likely to be small, but believed that wouldn’t soften the blow for the individuals and businesses affected.
The CJRS has been hailed by the Government as one of the most ambitious schemes in the world to support employers who decide to retain jobs, but Paresh said it clearly had some small faults and caveats.
“The portal required to submit information on furloughed workers is still unavailable and we aren’t likely to see payments made until the end of April,” explained Paresh.
“However, we do now know what businesses need to submit and how they should go about furloughing workers and so it is important that they take the necessary action now if they are affected by this ongoing pandemic.”
The CJRS is open to all UK employers for at least three months starting from 1 March 2020 and will allow for businesses to claim for 80 per cent of furloughed employees’ usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.
“Those who are self-employed will also receive similar support via the Self-Employed Income Support Scheme, but here again, those who have been operating for a short time and who are yet to submit a self-assessment tax return may miss out on this support,” added Paresh.
The firm is calling on businesses and individuals affected by the economic impact of Coronavirus to seek professional help from their team by visiting www.rdpnewmans.com.
