The government’s coronavirus job retention scheme (CJRS) opened for applications at 8am on Monday, with employers expected to claim for millions of workers put on temporary leave because of the crisis.
HM Revenue & Customs said claims for 67,000 employees had been made in the first 30 minutes of the scheme opening. Under CJRS, the government will cover 80% of a worker’s wages, up to £2,500 a month, if they are not working but kept on the payroll. Millions of workers across the economy have been furloughed because of the Covid-19 lockdown.
The chief executive of HRMC, Jim Harra, told the BBC Radio 4’s Today programme: “The big payroll date this month is on the 30th, so employers can claim anytime today, tomorrow or on Wednesday, and there’s time to get that money into their account for the 30th of April.”
The chancellor, Rishi Sunak, said: “Exactly one month ago today I announced the unprecedented decision to step in and help pay people’s wages. We promised support would be available by the end of April – today, we deliver our promise.”
Rishi Sunak #StayHomeSaveLives
(@RishiSunak)Exactly one month ago today I announced the unprecedented decision to step in and help pay people’s wages.
We promised support would be available by the end of April – today, we deliver our promise.
The Coronavirus Job Retention Scheme is now live: https://t.co/Y6ulSecuwI pic.twitter.com/J21dSlE2iZ
The CJRS system can process up to 450,000 applications an hour. Employers should receive the money within six working days of making an application.
HMRC has deployed 9,500 staff to deal with queries, including 5,000 on web chat, but there are fears that the website could crash and that phone lines could also be overwhelmed. This would mean that workers do not get paid, or that businesses that pay their staff go bust.
Harra expressed confidence that the system would be able to cope with demand. “We have scaled our IT system to cope with the maximum number of claims that we could receive – there are well over 2m pay-as-you-earn [PAYE] schemes and our system is big enough to handle a claim from every one of those.”
Income subsidies
Direct cash grants for self-employed people, worth 80% of average profits, up to £2,500 a month. There are similar wage subsidies for employees.
Loan guarantees for business
Government to back £330bn of loans to support businesses through a Bank of England scheme for big firms. There are loans of up to £5m with no interest for six months for smaller companies.
Business rates
Taxes levied on commercial premises will be abolished this year for all retailers, leisure outlets and hospitality sector firms.
Cash grants
Britain’s smallest 700,000 businesses eligible for cash grants of £10,000. Small retailers, leisure and hospitality firms can get bigger grants of £25,000.
Benefits
Government to increase value of universal credit and tax credits by £1,000 a year, as well as widening eligibility for these benefits.
Sick pay
Statutory sick pay to be made available from day one, rather than day four, of absence from work, although ministers have been criticised for not increasing the level of sick pay above £94.25 a week. Small firms can claim for state refunds on sick pay bills.
Other
Local authorities to get a £500m hardship fund to provide people with council tax payment relief.
Mortgage and rental holidays available for up to three months.
The CJRS has been extended until the end of June after the government decided to keep lockdown measures in place for at least a further three weeks. Employers can only claim for furloughed employees who were on their payroll on or before 19 March, and there are fears that many people will fall through the cracks. The scheme does not cover everyone who recently switched firms, or seasonal workers who were about to start posts at holiday parks, airports and youth hostels.
The Resolution Foundation thinktank estimates that 8 million workers could be furloughed, and said this mostly affects the low-paying hospitality and retail sectors, where almost half the workforce, or 3.1 million people, are expected to be put on temporary leave. This compares with just 4% of workers in finance and insurance, the highest paid sector.
Heather Self
(@hselftax)Portal now open. This thread has screenshots of what you will see when you submit a claim. https://t.co/JqLFWLeeSD
The Office for Budget Responsibility put the cost of the scheme at £42bn, before the extension was announced. The Resolution Foundation estimates that the extension could cost up to £12bn, although it noted that some firms were unlikely to use it for an entire extra month, assuming some physical distancing measures are eased.
Daniel Tomlinson, an economist at the thinktank, said: “It’s encouraging to see reports of many businesses successfully applying for the CJRS today. This scheme is central to the government’s response to this economic crisis and so understanding how well it is operating and the scale of take-up is crucial to helping us all make sense of how the crisis is unfolding.”
He said the scheme was what stood between “Britain experiencing high unemployment over the coming months, and catastrophic depression-era levels of long-term joblessness”.
Oliver Dowden, the culture secretary, told ITV’s Good Morning Britain that firms should only use the scheme if they could not afford to keep paying staff themselves. Asked about a report that Victoria Beckham was using the scheme for staff at her fashion company, Dowden said would not comment directly, but added: “The clear principle is: you should only be using it [the scheme] if you have to.”
Adam Marshall, director general of the British Chambers of Commerce said: “The government deserves credit for the speed, scale and flexibility of its response to the challenges facing our business communities. The focus should now be on delivering this support to firms on the ground.
“Our research indicates that two-thirds of firms have furloughed some portion of their workforce. With April’s payday approaching, it is essential that the application process is smooth and that payments are made as soon as possible. Any delay would exacerbate the cash crisis many companies are facing and could threaten jobs and businesses.”
Rain Newton-Smith, chief economist at the CBI, said the job retention scheme would “make a huge difference to tens of thousands of firms and millions of people, protecting jobs and living standards throughout the UK”.