Coronavirus: Millions to claim as UK furlough scheme goes live

Employers made 67,000 claims for workers in the first 30 minutes of the furlough portal going live.

Under the Coronavirus Job Retention Scheme, the government will cover 80% of workers’ wages, up to £2,500 a month, if they are put on leave.

Millions of workers are expected to be “furloughed” because of the lockdown.

Chancellor Rishi Sunak said: “We promised support would be available by the end of April – today, we deliver our promise.”

The Treasury says the system can process up to 450,000 applications an hour. Employers should receive the money within six working days of making an application, it says.

Rising cost

On Friday, Mr Sunak announced that the wage subsidy scheme would be extended by a further month, until the end of June.

The move came after the government confirmed that lockdown restrictions in the UK would continue for “at least” another three weeks.

Mr Harra declined to predict how much the scheme would cost. Last week, the Office for Budget Responsibility estimated a price tag of £42bn, but that was before the government extended the scheme by a month.

He said he was confident that HMRC could cope with the demand for the scheme.

“We have scaled our IT system to cope with the maximum number of claims that we could receive – there are well over two million Pay-As-You-Earn schemes and our system is big enough to handle a claim from every one of those.”

It’s a massive feat of engineering, an unprecedented reverse plumbing of the tax system. Instead of sucking money out of millions of pay packets, HMRC is pumping cash back to companies and employees as a lifeline.

The early signs are promising – calls answered, online forms submitted. But now the hard work – to get the money in place for payday – starts. HMRC says funds should be available within six days.

The intervening time is used to check firms are playing by the rules – not illicitly claiming for imaginary employees, for example. But the head of the tax office has admitted they won’t catch every fraudulent case; there has to be a trade-off between speed and compliance.

How does the scheme work?

Under the Coronavirus Job Retention Scheme, the government will cover 80% of workers’ wages, up to a maximum of £2,500 per worker, per month before tax.

Bosses will pay workers and reclaim the money from HM Revenue and Customs (HMRC) online after the service goes live on 20 April.

The minimum amount of time that an employee can be furloughed is three weeks, and firms are not expected to start receiving money until at least the end of April.

What does it mean if I have been furloughed by work?

According to new research by the Resolution Foundation, the take-up of the scheme has been higher than initially anticipated.

It estimates that eight million workers could be furloughed over the coming weeks.

It found that those working in low-paid sectors – such as hospitality or retail – are worst-affected, with almost half of the workforce expected to be put on paid leave.

Daniel Tomlinson, economist at the Resolution Foundation, said: “The government’s welcome Job Retention Scheme is what stands between Britain experiencing high unemployment over the coming months, and catastrophic depression-era levels of long-term joblessness.

“It is proving particularly essential in big, low-paying sectors like hospitality and retail, where around half the workforce are no longer working.”

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