HMRC braces for 450,000 claims for its furlough scheme every hour

by

The Government’s coronavirus furlough scheme website opened today with a capacity of up to 450,000 claims per hour – as millions of Britons face losing work amid the ongoing pandemic.

The scheme for workers who have been furloughed – given a temporary leave of absence – opened today and Chancellor Rishi Sunak announced a £1.25 billion package to aid companies in the innovation sector.

The lockdown is pressuring a number of British businesses, with one report warning that as many as 11.7million people could be furloughed or left jobless in the three months to the end of June. 

But Jim Harra, chief executive of HM Revenue & Customs (HMRC), said his organisation is ‘very confident’ the system running the coronavirus job retention scheme would work after it had been ‘tested at volume’.

He revealed the Coronavirus Job Retention scheme system had been tested at ‘up to 450,000 claims per hour’, and insisted that if employers are patient while using the Government website in the next few dats, they will be paid by April 30. 

Speaking to BBC Breakfast, he said: ‘Of course, there is a limit to the capacity of the system, so if every employer tries to use it at 8 o’clock this morning some will be asked to queue or come back later, that doesn’t mean the system has crashed, it simply means that it’s full.

The scheme for workers who have been furloughed – given a temporary leave of absence – opened today and Chancellor Rishi Sunak announced a £1.25 billion package to aid companies in the innovation sector

Jim Harra, chief executive of HM Revenue & Customs (HMRC), said his organisation is 'very confident' the system running the coronavirus job retention scheme would work after it had been 'tested at volume'

Jim Harra, chief executive of HM Revenue & Customs (HMRC), said his organisation is ‘very confident’ the system running the coronavirus job retention scheme would work after it had been ‘tested at volume’

‘But employers can claim any time over the few days, between now and Wednesday, and we will have the money in their bank account by April 30.’  

What does it mean to be furloughed?

Essentially, if you’re being furloughed by your employer, it means you’re being sent home, but will still receive 80 per cent of your salary by the Government, up to a maximum of £2,500 a month.

This Government job retention scheme is only for employed people, it does not apply if you are self-employed.

However, you first need to agree to be put on furlough by your employer, who can then apply for the money to the Government. You cannot apply for it yourself.

Your employer can choose to pay the remaining 20 per cent of your wages, although it is not obliged to do so.

If you earn more than £2,500 a month, your employer can choose to ‘top up’ your salary, but again it is not forced to do so.

You will still continue to pay income tax and national insurance contributions while on furlough.

The Government advice says: ‘If you and your employer both agree, your employer might be able to keep you on the payroll if they’re unable to operate or have no work for you to do because of coronavirus. This is known as being “on furlough”.’

He added: ‘I’m confident that if employers are patient, use the system, it’s available 24/7, and as I say, if your payroll date is April 30 you can claim any time today, tomorrow or Wednesday and we will get that money into your account.’

It comes as a report by an independent think tank suggested as many as 11.7 million people could be furloughed or unemployed over the next three months.

Employees in the lowest-paying hospitality and retail sectors are most likely, 50% more than average, to be affected, a paper by the Resolution Foundation has found.

Analysing the differing impact of the Covid-19 crisis within the labour market, the report states: ‘As many as 3.1 million employees (46%) in these sectors could be furloughed, with an additional 800,000 workers in this part of the economy becoming unemployed.

‘In contrast, only 4% of those working in the highest-paid sector, finance and insurance, are likely to be furloughed.’

It comes as the Government’s Coronavirus Job Retention Scheme (JRS) launched on Monday.

The report entitled Launching An Economic Lifeboat: The Impact Of The Job Retention Scheme warned of the possible extent of joblessness, but pointed to the mitigation impact of the scheme.

It said: ‘Although we estimate that non-working could increase by as much as 11.7 million in Q2 2020, this is heavily tilted towards use of the JRS (8.3 million employees).

‘Unemployment could still rise sharply to 3.4 million (10%) in Q2 2020, but because of the JRS it will not reach catastrophic levels.’

Google trends showing the popularity of search terms 'furlough' (in blue), 'universal credit' (yellow) and 'coronavirus symptoms' (red) over the past 90 days

Google trends showing the popularity of search terms ‘furlough’ (in blue), ‘universal credit’ (yellow) and ‘coronavirus symptoms’ (red) over the past 90 days

It added that the Job Retention Scheme ‘may well have the largest fiscal cost of any intervention’ adding the Government needs to provide ‘regular updates on scheme take-up’ and there was a ‘strong case for extending the scheme to cover shorter hours working’.

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.

‘The priority from today is for the Government to process claims as quickly as possible so that the millions of firms relying on it get the financial support they need.

‘Given the scheme’s central role in both providing a safety net and restarting economic activity, the Government should provide regular updates on take-up and payments, and extend it to allow shorter-hours working.’