COVID-19 – explaining the Job Retention Scheme
For dental practice owners, taking good care of your dental team is absolutely essential during these unprecedented times. Your team is the backbone of the business, who will help you steer your practice through these unchartered waters to dry land and to the brighter times that lie ahead. They will also be dealing with worries about their loved ones and may be concerned about their jobs, too.
As the practice owner, they will be looking to you to allay their fears about their job – and money. But there is a scheme that might be available to you and your dental team.
Coronavirus Job Retention Scheme
All UK employers can access this and it will allow you to continue to pay part of the salary of any “furloughed worker”.
A furloughed worker is one who is NOT doing any work in or for your business – for example, someone who has been sent home. If they are still working at the practice, assistance is not being offered to these individuals.
If someone at your practice qualifies as a furloughed worker, HMRC will reimburse 80% of the wage costs of up to a cap of £2,500 gross, per worker, per month. This measure will run for a three-month period until 31 May 2020, and can be backdated to 1 March.
How could this look in practice?
Say you have an employee on £36,000 per year (gross)/£3000 per month (gross), who is furloughed. The government will reimburse 80% of £3,000, so that’s £2,400 per month, putting them under the £2,500 cap.
For you, the cost will be £3,000 per month, minus the reimbursement of £2,400. So that’s £600 per month, plus NICs and any other benefits, if you choose to keep the employee on 100% of their pay. You have the option to pay the employee just the 80% that you receive back, so the cost to you in that case would be NIL on employees where the 80% is less than £2,500 per month
HMRC are setting up a system for employers to claim this help as a matter of urgency. What you can do in the meantime is do designate furloughed workers and notify them of the changes ahead. Of course, changing the status of an employee must comply with employment law and you’ll have to consult their contract.
HMRC will have an online portal to submit information about furloughed employees and their earnings; this is all part of the work in progress. We’ll update you as and when it’s live, so watch this space.
An open, honest approach is essential for team morale at any time. But as we are all entering the great unknown together, there really is no better time to ensure that they are being given the full picture. For support in making any – hopefully, temporary – changes to your employee structure, give us a call at Figurit. As specialist accountants, we offer dental-specific advice and can help you make positive decisions to keep your practice operating. With the right support, you can protect your team (and your sanity!) and stay in control of your business during these difficult days.
For more information call Figurit on 020 7376 9333.