HMRC to pay furlough wages from next week

The government will start paying employers 80% of furloughed workers wages from next Monday (20 April), according to HMRC chief executive Jim Harra.

Under the government’s furlough scheme, which is aimed at preventing redundancies during the COVID-19 pandemic and lockdown, firms can furlough employees and apply for a grant that covers 80% of their monthly wage costs, up to £2,500 a month, plus National Insurance and pension contributions.

The scheme was launched at the beginning of March but employers have had to cover the cost of furloughed employees’ wages whilst HMRC raced to put the payment portal in place.

Speaking to the BBC, Harra said that the portal had been successfully tested on a “small number” of companies and is ready to be launched on Monday.

Asked if HMRC is confident the new payment system will be able to process thousands of claims in time for the last banking day of the month, Harra said: “We have tested the new system up to a volume of 450,000 claims per hour, 24/7, so there will definitely be time for all employers who are eligible to make claims and get money before the main payroll date before the end of the month.”

He said that any employer who operates a PAYE scheme and has had to furlough workers for three weeks or more will be entitled to make a claim via the portal.

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Some employers have expressed concern that the scheme only runs to 30 May and that if they have to make redundancies they will need to give the employees 45 days’ notice which could fall outside the furlough period.

Asked if there will be an extension to the furlough, Harra said: “I am aware that redundancies require a consultation period and that people will be looking at that - the Chancellor is committed to extending this scheme if that is necessary. At the moment it applies to furloughs running up to the end of May but government will definitely keep that under review.”

Harra said he expected companies to “do the right thing” when furloughing workers and ensure furloughed employees do not work for the company whilst furloughed.

However he added: “We do reserve the right to come along afterwards and check everything is OK but our main priority is to get money into employers' bank accounts promptly so they can make their payments.”

RHA policy and public affairs MD Rod McKenzie greeted the news of the portal launch with caution.

“We need the proof of the pudding. The question is how quickly our SME hauliers who are really struggling right now can get the money they so rightfully deserve into their accounts.”

He also called for the government to make the furlough scheme more flexible so that haulers can call in furloughed drivers to meet fluctuating workloads or when drivers go sick.