The coronavirus job retention scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020.
This scheme exists to allow employers to claim for 80% of furloughed employees’ (employees on a leave of absence) via an online portal. The claim can be made for usual monthly wage costs, up to £2,500 a month. (plus associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions.)
The scheme is now up and running and you can make a claim here.
Frequently Asked Questions
This scheme works very differently from standard payroll and requires different information. There has been some confusion around making a claim so we have put together a few frequently asked questions – with their answers.
Who Can Claim
Any UK organisation with employees that had created and started a PAYE payroll scheme on 28 February 2020 can apply, including:
- recruitment agencies (agency workers paid through PAYE)
- public authorities
Employers can use this scheme anytime during this period.
You can only make one claim per PAYE scheme every three weeks. This means that you must include all eligible employees when you claim. The ICAEW advises that:
“Care should be taken to include all eligible employees for a claim period within a single claim, as a further claim is not possible for the same claim period. You can claim 14 days in advance, but claims cannot end more than 14 days ahead of the date of the claim.”
Businesses that have both weekly and monthly paid employees will need to amalgamate both the weekly and monthly paid staff into the same claim. This is because you are only allowed to make one claim per PAYE scheme every three weeks.
The grant calculation also uses calendar days for the pay month, rather than working days which many businesses use when calculating their own payroll.
This means that you won’t necessarily be able to just extract figures from your payroll and upload them.
Be careful to ensure that the figures in your claim are correct as if there are mistakes your claim may not be rejected but, if a discrepancy is uncovered down the line you will have to pay back any overpayments.
Making A Claim
Admin Time & Costs
Currently, employers with 100 or more employees are able to upload their data to the coronavirus job retention scheme on a spreadsheet. This is a relatively quick and easy process.
Employers with less than 100 employees are currently needing to input each employee’s details by hand. Smaller employers are understandably frustrated that this system is unfair and causing logistical problems.
HMRC has indicated that it will consider reducing the 100-employee requirement in order to upload via spreadsheet. We will keep you up to date as this information becomes available.
If you currently employ someone to manage your payroll then they will make the claim on your behalf. It is important that you instruct them to do this as they have access to your Government Gateway.
If you are struggling with the process of making a claim for furloughed employees you can employ a professional to manage the process for you.
We at K.A.Farr & Co are currently supporting our clients to submit claims under the coronavirus job retention scheme. We provide payroll services to businesses of many different sizes in a variety of industries.
Address & Postcode
One of the pages on the HMRC portal asks for a postcode associated with that account. It will then give you a list of addresses for that postcode to choose from. Many people have assumed that HMRC is asking for the address of the bank. (As it follows the page asking for bank account data).
However, the postcode you need to enter is for the address of the employer (or the individual if the claim is for a domestic worker).
Claiming As A Director
Company directors who are employed by the business are able to claim for 80% of their wages. However, if a director is paid annually at the end of March they are ineligible for the coronavirus job retention scheme. This is because their annual salary wasn’t paid before the 19th of March.
HMRC states that the legislation states that the payment of earnings in 2019/20 had to be made before 19 March.
Mistakes & Amendments
Currently, there is no facility to correct any mistakes which were made when filing a claim. For example;
If someone claimed too much National Insurance in April, you aren’t able to correct it by claiming less in May.
However, HMRC has stated that: “The ability to amend for future claims will be available, but we do not have a process in place at the moment.”
Many employees will have agreed on salary sacrifice for benefits such as childcare vouchers or pension contributions. For employees where this is the case this amount is the basis of their furloughed pay (not their original pay).
This means that as an employer you must still pay the pension contributions or provide whichever benefit has been agreed upon.
To find out more about the Coronavirus Job Retention Scheme you can click here.