Eight hundred thousand employers have applied for grants under the United Kingdom’s coronavirus job retention scheme (CJRS), and 6.3 million jobs have been furloughed, HM Revenue & Customs announced.
The total value of claims made by midnight on May 3 was £8 billion, HMRC tweeted on May 4. There were 27.9 million paid employees before the COVID-19 social distancing measures were implemented in March, according to the labor market overview published by the Office for National Statistics in April. The CJRS, introduced on April 20, covers 80 percent of a furloughed employee’s wages — subject to a cap of £2,500 per month — for the March-June period.
Chancellor of the Exchequer Rishi Sunak has sought to reassure business groups concerned at the prospect of mass redundancies if government support is not extended beyond June.
“To anyone who's anxious about this, I want to give them reassurance today that there will be no cliff edge to the furlough scheme. I am working as we speak to figure out the most effective way to wind down the scheme and ease people back into work in a measured way,” Sunak told ITV News on May 4. “But as some scenarios have suggested, we are potentially spending as much on the furlough scheme as we do on the National Health Service, for example. Clearly, that is not a sustainable situation, which is why — as soon as the time is right — we want to get people back to work and get our economy fired up again.”
A “bounce back loan” scheme for small businesses, introduced earlier on May 4, is going to “get money out to businesses incredibly fast,” Sunak added. “There’s such a simple form to fill out, and it's a matter of days for those businesses to get that cash in their account.”
"The fight against the virus must remain the top priority, but the planning and communication of a carefully phased approach to lifting lockdown must begin immediately," British Chambers of Commerce President Ruby McGregor-Smith said in a May 1 letter to Prime Minister Boris Johnson. The government will need to “extend and adapt loan, grant, business rates holiday, and job retention schemes,” she said.
The government has “acted at speed and scale to deliver cash to firms on the ground,” and must “ensure these schemes continue to evolve to support a phased restart of the economy, enabling businesses to survive through this crisis and thrive in the future,” McGregor-Smith added.
Three-quarters of firms surveyed by the British Chambers of Commerce had furloughed some of their staff, the network said in an April 29 release. “The data revealed almost no redundancies had been made by the businesses surveyed, demonstrating the importance of the furlough scheme to preserving jobs,” it said.
There will be an element of double counting of workers in the CJRS figures because a small number will have been furloughed from part-time jobs by more than one employer, the Financial Times noted. HMRC estimated the number of jobs furloughed based on claims made on behalf of Pay As You Earn schemes.
Self-Employment Income Support Scheme
HMRC also announced on May 4 that it is contacting self-employed taxpayers who may be eligible for the self-employment income support scheme. “Those who are eligible will be able to claim a taxable grant worth 80 percent of their average trading profits up to a maximum of £7,500 (equivalent to three months’ profits), paid in a single installment,” HMRC said.
HMRC invited taxpayers or their agents to use a new online tool to check eligibility. The claim service will open on May 13, and those eligible “will have the money paid into their bank account by May 25, or within six working days of completing a claim,” HMRC said. The tax faculty of the Institute of Chartered Accountants in England and Wales said the application portal “will open to taxpayers on a staged basis between May 13 and 18.” The faculty said it had pressed HMRC to allow agents to claim on behalf of clients, but “this has not proven possible — giving agents access would have delayed the delivery of this one-off application service.”
Tax Credits Concession
Working tax credit claimants who are working reduced hours because of COVID-19 will continue to receive their usual payments so long as they are still employed or self-employed, HMRC announced. Claimants must work a set number of hours each week, depending on their circumstances, to qualify.
“We will treat customers as working their normal hours until the [CJRS] and self-employment income support scheme close, even if they are not using either scheme,” HMRC added. While claimants do not need to contact HMRC about this change, they are required to notify it of other changes of circumstances.