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Markel Insurance

20 Apr 2020

How the Coronavirus Job Retention Scheme will support charities

With the majority of fundraising activity postponed and charity shops closed due to social distancing, UK charities are facing huge cash flow issues at a time when many are being called upon to support the response to the coronavirus crisis. The impact of this reduction in funding on the sector has been estimated by the NCVO to stand in the region of £4bn over the next 12 weeks. Consequently, many charities are evaluating how to ensure they survive this pandemic.

The recent pledge of £750m involves cash grants for charities that are providing key services during this time will certainly be well received. The funding will be split between charities directly allocated by government departments and smaller local charities, some of whom are providing a food and medicine delivery service through to offering financial advice.

The government has promised financial assistance to all UK businesses to help them weather the storm, including the Coronavirus Job Retention Scheme. This is a temporary scheme designed to support employers whose operations have been severely affected by coronavirus.

“Since the start of the coronavirus outbreak, I’ve made it clear that hard-working employers and employees should not have to suffer hardship unnecessarily.

Our Coronavirus Job Retention Scheme supports workers and businesses up and down the UK – and today we’re strengthening it because we will do whatever it takes to support jobs.”

Chancellor of the Exchequer Rt Hon Rishi Sunak MP

On the 27 March 2020 the government published further guidance on the Coronavirus Job Retention Scheme to clearly set out the financial support available to businesses in the UK.
The Scheme provides for all UK employers that had created and started a PAYE payroll scheme on 28 February 2020, including:

  • businesses

  • charities

  • recruitment agencies (agency workers paid through PAYE)

  • public authorities

This will come as a welcome relief for charities in what are unprecedented and uncertain times. Under the scheme, charities will be able to claim a grant covering 80% of the wages for a furloughed employee, subject to a cap of £2,500 a month. This includes both full and part time staff, as well as those on agency, flexible or zero-hour contracts. The scheme is open for at least three months from 1 March 2020, and could potentially be extended on government review in response to the crisis.

HM Treasury went on to commit to further assistance; on top of covering the wage bill, the government will also cover the costs of employer national insurance and pension contributions. This could potentially support charities with up to £300 per month, per employee.

For those charities that have already taken drastic steps to reduce outgoings, the new guidance also confirmed that those made redundant after 28 February can be reemployed and placed on furlough. Ensuring that staff are still in employment will hopefully help charities to recover as we emerge on the other side of this crisis.

Good news for those looking to help the NHS

It’s inevitable that some furloughed staff in the charity sector will no doubt feel ‘redundant’ being unable to help others via their normal, day-to-day charity work in times of need. Under the terms of the grant it is made clear that any employees placed on furlough cannot undertake work for the charity. However, there is still opportunity to help the fight against coronavirus; the government has set out clear provisions to allow people to volunteer without risking their pay in order to join the 500,000 members of the public who have signed up to help the NHS during the coronavirus outbreak.

BBC Big Night In – 23rd April

For those of you tuning into the BBC’s Big Night In fundraising event, the government has promised to match all donations from the night, pledging a minimum of £20m. The event will see the BBC’s two biggest charitable partners, Children In Need and Comic Relief, joining together to raise funds for charities.

For further guidance and to make a claim under the scheme, visit click here
 

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