BUSINESSES across the country who have applied for the government’s emergency furlough scheme are set to receive payment by the end this month.

The Coronavirus Job Retention Scheme was introduced to help support businesses who have been severely affected by the coronavirus outbreak, enabling employers access to a grant which covers 80 per cent of the wages of staff that would otherwise have been made redundant.

When will furlough money be paid?

Chancellor Rishi Sunak confirmed that the furlough scheme will be open for applications on 20 April.

After this date, successful claimants will have to wait “several days” before receiving their money.

The scheme is expected to be fully operational before the end of April, and is estimated to benefit more than 200,000 employees.

Mr Sunak said there had been “enormous improvements” in the loan scheme for companies, and said that staff at lenders had been working over Easter to manage the backlog of applications, in case there is “an acceleration in those numbers in the coming days”.

He added that Local Government Secretary Robert Jenrick has been “intensifying” efforts to ensure that councils were providing grants to firms that have been affected by the outbreak.

Can I still apply for the scheme?

The Treasury has extended the deadline for applications to its furlough scheme in an effort to prevent thousands of workers who are at risk of losing their job.

Initially, individuals had to be employed on February 28, 2020 to qualify for the Coronavirus Job Retention Scheme, but this date has since been extended.

Employers can now claim for furloughed employees who were on their Pay As You Earn (PAYE) payroll on or before March 19, 2020 - the day before the scheme was announced.

Under the scheme, employers can claim a government grant that will cover 80 per cent of the wages for their employees on furlough, up to the value of £2,500 per month.

Paymaster General Penny Mordaunt apologised the changes had not been made sooner, writing on Twitter: "This will help more people and is very welcome. Sorry it was not done sooner and know how worried people will have been.

"Hope to have an update on other Treasury matters soon."

How do employers access the scheme?

To access the Coronavirus Job Retention Scheme, employers will need to take the following steps:

  • Designate affected employees as ‘furloughed workers,’ and notify your employees of this change
  • Changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • Submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

HMRC will reimburse 80 per cent of furloughed workers wage costs, up to a cap of £2,500 per month and is working urgently to set up a system for reimbursement.

Existing systems are not set up to facilitate payments to employers.

If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan.