Guidance on reclaiming furlough pay (Coronavirus Job Retention scheme – CJRS) has been updated by HMRC. This is a summary of the main changes.
Change of date
While not directly related to claiming, some of the dates have been changed, which will make a difference to some employers and their staff.
The date by which a PAYE scheme has to have been created has been changed to 19 March (previously 28 February). So, payroll schemes set up between 28 February and 19 March now qualify.
You can furlough employees who were on your PAYE scheme before 19 March (previously 28 February). There is a condition attaching to this in that an RTI (Real Time Information) submission telling HMRC about payments to that employee must have been made on, or before, 19 March.
An employer can ask employees to undertake training while on furlough. This could be an opportunity to equip staff with new skills to make them more useful in the future.
If the furlough pay takes them below the minimum hourly rate under NMW (National Minimum wage) and NLW (National Living wage) legislation, the employer will have to “top up” wages to bridge the difference.
What isn’t clear is whether an employer can ask a member of staff to attend a training course at a third party’s premises or whether training is restricted to home working and, possibly, at the normal place of work.
The same “top up” rules apply to apprentices able to undertake training while on furlough.
There was no change in the guidance for directors. This is still a disputed area which the government has been asked to clarify.
How much to claim
The guidance has changed a little and now says the higher of average monthly earnings for the 2019/20 tax year or the same month’s earnings from the previous year.
Previously, it was the average of the eleven months in the tax year to end of February. The change penalises employees who were furloughed during March because, theoretically, their (reduced) furlough pay will form part of their average.
This is a point which will probably be argued over if only because quite a number of employees have already been paid furlough pay based on the previous calculation.
Making a claim
The information which HMRC will need is:
- your employer PAYE reference number
- the number of employees being furloughed
- National Insurance Numbers for the furloughed employees
- Names of the furloughed employees
- Payroll/employee number for the furloughed employees (optional)
- your Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
- your bank account number and sort code
- your contact name
- your phone number
You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.
Most of that is pretty straightforward but we admit that we don’t exactly know what some of them mean, although we can hazard a guess.
The sting in the tail, for larger(but not big) employers is this paragraph:
If you have fewer than 100 furloughed staff you will be asked to enter details of each employee you are claiming for directly into the system – this will include their name, National Insurance number, claim period and claim amount, and payroll/employee number (optional).
If you have more than 100 furloughed employees, you can upload a file (xls, xlsx, csv or ods).
We have a lot of clients with 20, 30, 40 (or more) employees on furlough. It is going to take a long time to type in individual details for each furloughed employee – and increases the risk of error.
We hope that some common sense prevails and they decide to allow file uploads for smaller employers. This
must be of benefit all round.
What isn’t clear is whether a claim has to be for a PAYE period and how much in advance a claim can be made.
The reality is that over 2 million employers will need to make claims. If the majority of those will need to enter individual employee details manually for each claim, it is going to take an awful long time.
If you haven’t already done so, you may like to read some of our previous posts about the current situation.
Also, there are snippets on our Facebook page
What can we do?
Where possible we will speak to our clients and submit claims on their behalf. Please bear in mind the comment above about the time this is going to take.
In a few cases where we are not designated as “tax agents” we will help employers submit their own claims.
Existing clients will always take precedence. However, if you are not one of our clients, feel confused and bewildered and feel you need help we will do our best to assist.
Our contact details are, as always,
Telephone – 01509 816150 (Most staff are working from home but there is usually someone in the office to take your call)
Email – email@example.com
Webform – Below