- HMRC latest guidance on COVID-19 Job Retention Scheme April 16, 2020
This is the latest from HMRC with some help re making a claim for CJRS. We can make the claim on your behalf, but we won’t know exactly what is involved until we get access to HMRCs portal.
We are also updating you on an important change to the scheme relating to employee eligibility:
- you can claim for employees that were employed as of 19 March 2020 and were on your PAYE payroll on or before that date; this means that you will have made an RTI submission notifying us of payment of that employee on or before 19 March 2020
- employees that were employed as of 28 February 2020 and on payroll (i.e. notified to us on an RTI submission on or before 28 February) and were made redundant or stopped working for you after that, and prior to 19 March 2020, can also qualify for the scheme if you re-employ them and put them on furlough.
More information on this can be found on GOV.UK.
How to claim
As you prepare to make a claim, please note:
- the online claim service will be launched on GOV.UK on 20 April 2020 – please do not try to access it before this date as it won’t be available
- the only way to make a claim is online – the service should be simple to use and any support you need available on GOV.UK; this will include help with calculating the amount you can claim
- you can make the claim yourself even if you usually use an agent
- claims will be paid within 6 working days; you should not contact us unless it is absolutely necessary – any queries should be directed to your agent, representative or our webchat service
- we cannot answer any queries from employees – they will need to raise these with you, as their employer, directly.
Information you will need before you make a claim
In addition to the information in our previous email, you will need to have the following before 20 April 2020:
- a Government Gateway (GG) ID and password – if you don’t already have a GG account, you can apply for one online, or by going to GOV.UK and searching for ‘HMRC services: sign in or register’
- be enrolled for PAYE online – if you aren’t registered yet, you can do so now, or by going to GOV.UK and searching for ‘PAYE Online for employers’
- the following information for each furloughed employee you will be claiming for:
- National Insurance number.
- Claim period and claim amount.
- PAYE/employee number (optional).
- if you have fewer than 100 furloughed staff – you will need to input information directly into the system for each employee
- if you have 100 or more furloughed staff – you will need to upload a file with information for each employee; we will accept the following file types: .xls .xlsx .csv .ods.
If you want an agent to act for you
- agents authorised to act for you on PAYE matters can make the claim on your behalf using their ID and password
- you will need to tell your agent which UK bank account you want the grant to be paid into, in order to ensure funds are paid as quickly as possible to you.
You should retain all records and calculations in respect of your claims.
- Job retention scheme rules April 16, 2020
Job Retention Scheme Update
Over the past couple of days there have been some more developments and guidance released by the government, specifically in relation to the Job Retention Scheme, and how they apply to company directors of owner managed businesses.
HMRC have finally clarified that the scheme extends beyond employees, and also covers the following groups, provided they receive some form of remuneration via PAYE:-
· Office Holders (including company directors)
· Salaried members of Limited Liability Partnerships (LLPs)
· Agency Workers (including those employed by Umbrella companies)
· Limb (b) workers
As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme.
Previously there was some confusion over the application of this scheme to company directors, due to the fact they are required to carry out certain duties to their company, in accordance with the Companies Act 2006. The JRS states that when an individual is furloughed, they are not allowed to undertake any work, and as such, this seemed to rule out company directors, especially those of owner managed businesses.
HMRC have now clarified the position by stating the following:-
“Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.
This also applies to salaried individuals who are directors of their own personal service company (PSC).”
For Agency Workers, including those under Umbrella companies, the following has been stated:-
“Where agency workers are paid through PAYE, they are eligible to be furloughed and receive support through this scheme, including where they are employed by umbrella companies.
Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them while they are furloughed, including for the agency’s clients.
Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree whether to furlough the worker or not.”
The furlough scheme is due to launch on 20 April and HMRC will be announcing over the coming days the procedures that will be required in order to process claims correctly. If you want to participate in the JRS and furlough your employees, or yourself, please contact us.
- Job Retention Scheme April 1, 2020
Written 25 March 2020
PLEASE NOTE: NOTE THIS GUIDANCE IS STILL INCOMPLETE AND THE GOVERNMENT NEED TO ISSUE FURTHER BRIEFING NOTES ON THE DETAIL.
Under the coronavirus Job Retention Scheme, all UK employers with a PAYE scheme will be able to access support to continue paying part of their employees’ salary for those that would otherwise have been laid off during this crisis. This applies to employees who have been asked to stop working, but who are being kept on the payroll, otherwise described as “furloughed workers”. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant. The Coronavirus Job Retention Scheme will cover the cost of wages backdated to 1ST March and is initially open for 3 months but will be extended if necessary.
All UK-wide employers with a PAYE scheme will be eligible – this includes the public sector, Local Authorities and Charities.
What we know so far:
- If your businesses has been severely affected by the Pandemic and you were about to make employees redundant, the CJRS offers the alternative of “Furlough”. The ‘furloughed workers’ will be on ‘furlough leave’. During this time, they will continue to be employed by the employer, but they will not be required to work for a temporary period of time. The CJRS will assist employers by reimbursing them up to 80% of the wages of each ‘furloughed worker’, up to a maximum of £2,500 a month. (We will update you once the government confirms whether this means £2,500 a month before or after tax).
- The CJRS will run from April 2020 (date to be confirmed) but will be backdated to 1 March 2020 (such that anyone who has been laid off since 1 March and has not left the business under redundancy can be caught by the scheme) and is expected to run for at least 3 months (although the government may decide to extend it as things progress).
- The current guidance around the CJRS talks about “reimbursing” employers for wage costs and so our expectation is that employers will need to pay their employees at least 80% of their normal wages during any lay off period and then they apply for a grant which will reimburse them. This means that employers are likely to have to deal with cash flow issues in the interim.
We have had many clients asking us about the mechanics of the CJRS and below we outline (as best we can) the order of actions an employer should take to comply with the scheme:
- Employers will need to designate affected employees as ‘furloughed workers’ and notify those employees of this change and agree this with them.
- You should check employee contracts of employment to see if there is a contractual right to lay employees off if there is a downturn in work. If not you will need to discuss and agree with employees that they are “Furloughed”. This may involve a negotiation. Either way you will probably need employees’ consent. Given the alternative of redundancy one assumes common sense will prevail. Note if you have more than 20 employees whose contracts need to be changed a more formal consultation process will need to be done and we recommend legal advice at this point.
- Employers should notify employees in writing and explain why the decision was necessary (Covid-19 Pandemic).
- Please note it is solely the employer’s choice to Furlough and not the employee. If the employee requests to be furloughed, the employer can refuse to agree e.g. if there is still work for them to do.
- Employers then need to submit information to HMRC about those employees who have been designated as ‘furloughed’ and their earnings via a new online portal which is being set up. If you are doing this for the March payroll run you should keep a list of Furloughed employees and salary details.
- HMRC will then reimburse 80% of wage costs for ‘furloughed workers’ up to a cap of £2,500 per month, per ‘furloughed worker’. Exactly when these funds will be available is currently unknown. (We will advise you when the Portal is “live”).
- Furloughed employees could be paid 80% of their pay or higher if the employer chooses (bearing in mind the CJRS will reimburse a maximum of 80% to a maximum of £2500 per employee).
- Points 8 and 9 below need Government clarification.
- In the government’s guidance to employees on this subject, it mentions that employers can claim a grant of up to 80% of a ‘furloughed employee’s’ wages ‘for all employment costs, up to a cap of £2,500 per month’. This suggests that this covers thing such as pension contributions, employer’s NICs etc.
- Further information on this point is awaited so it can be confirmed whether employers can only use the CJRS grant in respect of an employee’s basic pay or their average take-home pay (which may, for example, include overtime and commission too).
- Employees should not undertake any work for their employer while they are ‘furloughed’. The fact that the employer is unable to give its employees any work for the time they are ‘furloughed’ is what allows them to claim up to 80% of the employee’s wage for all employment costs (up to £2,500 a month).
- This scheme does not seem to apply to those on short-time working (e.g. shorter days) or those working certain days of a working week, although this is not yet clear. We will update you when we have further information.
- Guidance is needed on whether employees can work “elsewhere” to make up the 20%
- Further guidance is awaited on employees on holiday, maternity, sick or self-isolating.
Key points for employers:
- Ensure that you document your thought processes and discussions when deciding which employees are to be designated at ‘furloughed’ – treat it as if it is a redundancy situation and think about how you would need to evidence your decision.
- Consider if putting employees on furlough leave is absolutely necessary and reasonable to do in the circumstances. Again, make sure you record your reasons (in writing).
- Ensure that you notify employees being designated as ‘furloughed’ in writing, giving your reasons, making clear any terms that will apply during this period, and offering reassurance that financial support via the CJRS will be available.
- The CJRS is intended to be a reimbursement scheme so it is envisaged that the employer will have to make the payments to employees first and then seek reimbursement from HMRC.
- Be understanding that there may be groups of employees that feel hard done to e.g. those who are genuinely sick with the Coronavirus, those having to self-isolate as a family member is sick, the over 70s and those in vulnerable groups who are only entitled to SSP or contractual sick pay (which may be less than 80% pay) and they feel it is unfair that those ‘furloughed’ are getting much more.
- COVID-19 GUIDANCE – LATEST March 20, 2020
In these uncertain times we wanted to reach out to all our clients to let you know we are here to offer support and guidance over the coming months.
Health and wellbeing are the most important things right now and so we have made the decision that our team will be working remotely from Monday 23rd March. We will continue to complete your accounts, VAT, payroll and tax returns etc in a timely manner. Fortunately, we have invested in recent months in new hardware and software which enables us to work from home with minimum disruption.
Although we will still be collecting, scanning and distributing the post, we will be unable to receive large amounts of business records in paper format. However, we are able to offer, free of charge, access to the Receipt Bank app and software, which means that you can just take a photo of your invoices, receipts and bank statements and they will be automatically uploaded into our accounting systems. If you and your people are working remotely and/or struggling to keep your records straight then please let us know. We can install a variety of Cloud based solutions to help and if Receipt Bank isn’t appropriate for you, you can scan and email documents to us we can help in posting them into the accounting systems.
We are expecting HMRC to issue further guidance and support and as your registered agent we work closely with them. I expect that we will receive news on “time to pay” arrangements and maybe relaxed filing deadlines and once we hear them we will be letting you know how this affects you. My colleague Jason will be monitoring this and will be in touch directly.
Our service levels may drop slightly as we adapt to the new working arrangements and also to comply with any new “lockdown” rules that may be imposed on us. We will still be able to answer calls, but have had to reduce the operating hours from 10am until 4pm. In addition, as we expect to be having to send out more group emails, we may not have time to refine the lists and you may receive more than one copy of messages. We won’t be having any face to face meetings with clients, but have facility for video calling through all popular channels, including Google and Microsoft apps.
If you need anything let us know. Our business depends on your business and we must all pull together during the next few months.
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