The Coronavirus Job Retention Scheme (CJRS) is a lifeline for a wide range of businesses, giving employers the ability to retain staff by putting them on temporary leave or ‘furlough’. Given the nature of the scheme, it’s easy to assume that sorting out a claim is an extension of your payroll whereas, in fact, it’s a different standalone calculation.
Here are answers to some typical questions about access to financial support and, in particular, making a CJRS claim:
How do I calculate what my employees should be paid under the Coronavirus Job Retention Scheme?
To work out how much to claim for furloughed employees you will need to use calendar days for the pay month. This differs from the process adopted by many employers, who calculate their payroll based on working days in the month. It’s not, therefore, a case of simply uploading figures extracted from your payroll. Bear in mind that, if you get the figures wrong, a claim won’t necessarily be rejected straight away. However, if HM Revenue & Customs (HMRC) subsequently discovers discrepancies, you will have to pay the money back at a later date. Further guidance is available at: https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme
If I make a mistake with a CJRS claim, how do I correct it?
Currently, it is not possible to make changes to a claim, so what do you do if you make a mistake? HMRC says it will be possible to amend future claims, but the process is not yet in place. Until then, take extra take care when running the payroll for furloughed employees and making a claim for support under the CJRS. If HMRC rejects your claim for a CJRS grant but there is no logic to it, you cannot re-submit a claim for three weeks.
How should I treat claims for directors who are paid annually?
Directors paid annually are eligible to claim, but must meet the relevant conditions and, unfortunately, some businesses will fall foul of the cut-off dates. Anyone applying for a furlough grant who didn’t pay their annual salary by March 19 will be ineligible to claim. There is no way around this – the legislation is quite clear that payment of earnings in 2019/20 must have been included in an RTI report filed by March 19.
How do I deal with employees affected by the TUPE rules?
HMRC advises that a new employer can claim under the Coronavirus Job Retention Scheme in respect of employees of a previous business who TUPE transferred after 28 February 2020.
Can furloughed employees continue to represent the interests of others?
Yes. Whether they are union or non-union representatives, employees are allowed to undertake duties and activities for the purpose of individual or collective representation of employees or other workers while furloughed. The proviso is that they do not provide services to or generate revenue for or on behalf of the employer.
When should I put in a CJRS claim?
Only one claim can be made for CJRS support per PAYE scheme in any three-week period and HMRC says this must be shortly before or during your payroll run. If you have furloughed some employees who are paid weekly and others who are paid monthly, what is the best way forward? The advice from the Institute of Chartered Accountants in England and Wales is 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. Choose the furlough period that covers all your monthly paid staff and as many weekly paid workers as possible and then put through the remainder of weekly paid staff in the next claim, three weeks later.
How do I deal with salary sacrifice under furlough?
Where a worker has agreed to give up a proportion of their pay in exchange for a benefit in kind, typically in relation to pensions but possibly for childcare vouchers or a company car, they are earning less in cash pay terms. Employers must use this as the basis for the furlough claim, not their original pay level. Employers must continue to pay a pension or provide benefits in kind in accordance with the employee’s contract. Changing the contract now won’t make any difference and you can’t backdate it to February.
Is it possible to extend furlough periods?
Employees must remain on furlough for at least 3 consecutive weeks. However, employees can be placed on furlough more than once, and one period can follow immediately after an existing furlough period, for the duration of the CJRS. In response to queries about extending the furlough period beyond the minimum 3-week period, HMRC has confirmed this is possible. Each consecutive period counts as a single furlough period, regardless of the initial period. The clock is only reset if the employee returns to work and is then furloughed again. So, an initial furlough period of three weeks could be extended for a further two weeks, so long as the employee does not return to work at any point.
What happens if I don’t have a Self-Assessment UTR, CT UTR or CRN?
To apply for a CJRS grant employers must provide either a self-assessment UTR, a corporation tax UTR or a company reference number. Not all employers can supply this information, such as those who employ domestic staff and some overseas companies. To ensure you are not prevented from making a claim, answer ‘No’ to the questions:
- Does the employer submit a company tax return?
- Is the employer registered for self-assessment?
- Is the employer registered at Companies House?
You will then be asked the name of the employer and the claim can proceed.
How do I find out if I’m eligible for financial support?
For businesses struggling with the impact of the COVID-19 pandemic, there is a raft of financial support available from the government. It’s not always easy to check eligibility, so HMRC has created a Business Support Finder Tool to help you work out what you can claim.
What help is available from the government to deal with CJRS queries?
HMRC is urging employers not to telephone for assistance with the Coronavirus Job Retention Scheme, as fewer advisers are available to take calls. However, there is a lot of information available online and you can speak to an adviser via webchat https://www.gov.uk/government/organisations/hm-revenue-customs/contact/get-help-with-the-coronavirus-job-retention-scheme
What kind of support is on offer to small businesses?
Full details, regularly updated, about the financial support available to small businesses can be found here: https://www.gov.uk/government/collections/financial-support-for-businesses-during-coronavirus-covid-19
On May 5 the Department For Business, Energy And Industrial Strategy is organising a webinar to explain what financial support is available for small businesses affected by the coronavirus outbreak. The 1-hour webinar commences at 11.00am and will cover:
- Eligibility for small business grants
- Applying for a loan
- Claiming for wages through the Coronavirus Job Retention Scheme
The situation remains fluid and HM Revenue & Customs is updating its guidance regularly. For assistance with CJRS claims, contact us on 01785 243276.