The Government will pay up to 80% of salaries for employees who are asked to stop working but kept on company payroll.
The Coronavirus Job Retention Scheme, announced by Chancellor Rishi Sunak last Friday (20 March), is designed to keep people employed, even if they are not working.
The compensation will cover up to a maximum of £2,500 per month per employee, just above the median income. Any employers will be eligible, but will need to contact HM Revenue & Customs to claim the costs, which can be backdated to 1 March.
Sunak said there was "no limit on the amount of funding available" but he expected the first grants to be paid within weeks.
It was not clear whether the pledge would cover all costs to employers, such as National Insurance and pension contributions, or only the employee's contracted salary.
The announcement comes as Prime Minister Boris Johnson announced that bars, pubs and restaurants must close across the UK.
This article first appeared on our sister title Professional Adviser