Furloughed for Nanny Payroll
Please find below details that we know about Furloughed Workers:
Under the Coronavirus Job Retention Scheme HMRC will reimburse employers 80% of furloughed workers wage costs, up to a cap of £2,500 per month.
Please note that it is up to employers if they choose to top up the salary so that the employees obtain their full salary during the period of lay off.
Oxford English dictionary defines ‘furloughed' as "(of a worker) laid off, especially temporarily". In designating the employees as furloughed workers the employer is laying them off, i.e. sending them home as there is no work, for a period whilst retaining them as employees.
If an Employer/Parent intends to use the scheme, they will need to discuss with the relevant Employee/Nanny that they will be reclassified. This change remains subject to employment law and depending on the employment contract, may be subject to negotiation.
The Employee/Nanny must be kept on the payroll rather than being taken off, but will no longer work for the Employer/Parent.
A HMRC online portal will be set up, which will require further information on Employees that have been furloughed - more detail on this will be released from the government in due course.
'The advantages of the above scheme as we see it, is that it allows Employees to keep their jobs. They are not being made redundant. Employers that are now under temporary pressure can claim a grant to cover their Employees' wages which they will need until the coronavirus crisis passes, but are currently unable to provide work for.'
Way2paye cannot guarantee that you will be eligible for this payment. Unfortunately you are not eligible for the Employment Allowance Scheme (EAS) that HM Revenue and Customs (HMRC) currently offer for Business, Small Employers, Charities and Care or Support workers. If you employ someone for personal, household or domestic work (like a nanny or gardener) unfortunately you are exempt from the EAS scheme.
We hope that they will not exclude you from the 80% reimbursement for the job retention scheme, however as nothing is clear we want you to be aware that it could be a direct cost to you.
You must decide if you wish to use this scheme and absorb the cost until a claim may possibly be made for you. Way2paye will claim it for you if we can, however this has not been confirmed or officially legal yet . We are waiting for advice from the Government to see if we can.
An extremely difficult discussion to make unfortunately. Thinking of you and wishing you and your families all the best over these very difficult weeks ahead.