As a bookkeeping practice we’re used to working very closely with our clients, who often rely on us to keep them informed about topical news and updates regarding tax and accounts. With the barrage of recent updates being issued from government during the COVID-19 crisis we are having to respond quickly to support our clients and keep them up to date.
Like many businesses we have been forced to take advantage of technology and to our surprise our regular Keep in Touch Zoom meetings have been a big hit with all who have participated. Our meeting this week focused on the systems and processes employers need to take in furloughing their employees and I would like to share here some of the points raised.
The purpose of furloughing staff during this crisis is to save the jobs of employees who might otherwise be made redundant. Once social distancing is eased businesses will be keen to trade again and having their workforce remaining in their employment will allow them to get up and running quickly.
Government are giving businesses significant financial support to help them through this crisis, one of which is an 80% grant of furloughed staff’s wages, up to a maximum of £2,500 per month. This of course will be a much needed life saver for many companies. However, business owners should be aware they are likely to be called to account by HMRC at some point in the future and keeping accurate and well documented records will be key to any investigation.
Furloughing an employee should be a two way discussion as the employer will need the agreement of the staff member. Here are our tips for getting the furlough process right:
- Talk to your staff. Once you have recognised a potential need to furlough an employee engage with them as soon as possible. Let them know that furlough might be a possibility and allow them time to get used to the idea and ask questions.
- Once an employee furlough has been confirmed there needs to be a written agreement setting out the terms of the furlough, signed by both parties.
- The employee cannot undertake any work for their employer whilst they are on furlough, although they can complete any training during this time.
- All other terms of employment remain in place throughout the furlough period, and all usual policies and procedures continue to apply.
- Keep written evidence of all communications you have with your employees, including details of conversations & emails, details of the employees pay at 28 Feb, an explanation of why your employee needs to be furloughed and the basis for selection, where only some of your staff are furloughed.
- Keep your employee furlough documents in a safe place for up to 5 years so that they are accessible if you have an audit.
Above all treat your employees with respect, keep them informed and remember they are the most valuable asset in your company.
We would be pleased to invite local businesses to join us for our weekly Zoom updates. If this is of interest to you please forward your contact details to email@example.com.