The Coronavirus Job Retention Scheme isdesigned to help employers whose operations have been severely affectedby coronavirus (COVID-19) to retain their employees and protect the UK economy.
This temporary scheme is open for at least four months starting from the 1stof March 2020 and employers will be able to backdate claims where employees havealready been furloughed from that date.
The claim can't start any earlier thanthe date the employee was first furloughed.
This step-by-step guide willtake you through five sections: step one – essential information, step two – beforeyou make your claim, step three – calculating your claim, step four – making your claim, step five – after submitting your claim.
In addition to this webinar, HMRC has now published a step-by-step guide on how to claim for your employeeswages through the Job Retention Scheme.
Before taking you through the steps tomake a claim, here's a quick look at the scheme in general.
To be eligible for theCoronavirus Job Retention Scheme, an employer must agree with the employeethat they are a furloughed worker.
Employees must be notified that they'vebeen furloughed in writing, details which shall be retained by the employer forfive years.
Any employees you place on furlough must be furloughed for aminimum period of three consecutive weeks.
When they return to work they mustbe taken off furlough.
Employees can be furloughed multiple times, but eachseparate instance must be for a minimum period of three consecutive weeks.
Employees can't do any work for the employer that has furloughed them or alinked or associated company, including providing services or generating revenue.
Furloughed employees can engage in training as long as by doing thistraining the employee isn't providing services or generating income for theirorganisation or linked organisation.
Employers can claim 80% of gross wagesfor each furloughed employee, up to a maximum £2500 per month.
The associated employer national insurance contributions and pension contributionsup to the level of the minimum automatic enrolment pension contributions on thefurlough pay.
A separate claim is needed for each PAYE scheme that the businessis enrolled in.
Employees can only claim for furloughed employees that were ontheir PAYE payroll on or before the 19th of March 2020.
An RTI or real-timeinformation submission notifying payment in respect to the employee must be madeto HMRC on or before the 19th of March 2020.
The employer must have a UK bankaccount.
If you made employees redundant or they stopped working for you on orafter the 28th of February, you can re-employ, put them on furlough and claimtheir wages from the date they were furloughed, even if you don't reemployedthem until after the 19th of March 2020.
This applies as long as the employee hadbeen notified to HMRC on an RTI submission on or before the 28th ofFebruary 2020.
This means an RTI submission notifying payment in respectof that employee to HMRC must have been received on or before the 28th ofFebruary 2020.
For more information on the scheme and further eligibilityrequirements, visit guidance on GOV.
UK.
You can find more information aboutthe Coronavirus Job Retention Scheme in our recorded webinar, available on HMRC'sYouTube channel.
Let's take a closer look at the five steps mentioned a fewmoments ago.
I'll now be referring to the Coronavirus Job Retention Scheme as CJRS.
Before starting your claim it's important that you read the guidanceabout the scheme available on the GOV.
UK website, or view the recorded webinar.
The only way to make a claim is online.
Theservice is designed so that it's easy to use.
Information you will be required toprovide should be details you currently use for your payroll run.
To help you getthrough the process as smoothly as possible, please make sure you have allthe information required in steps two and three before you start your claimonline.
HMRC will check the legitimacy of all claims made, it's the claimantsresponsibility however to ensure the information provided in the claim isaccurate.
All records and calculations in respect of your claim must be retained, even if you choose to have an agent acting on your behalf.
Please note thatemployers will receive payment six working days after making the claim.
It'simportant you factor this in when making your claim to ensure you have adequatefunds available when making payments to your employees.
Step two – before you make your claim.
If you have an authorised agent, you must firstly decide whetheryou want to make your own claim or you want your agent to act on your behalf.
Ifyou have an agent you have authorised to deal with your PAYE matters, theycan make a claim for CJRS on your behalf using their ID and password.
FormFBI2 authorises your tax representative to use PAYE online services.
Thisallows them to receive information from HMRC on your behalf.
If the agent ismaking the claim for you, tell them which bank account you want the funds to bepaid into to ensure funds are paid as quickly as possible to you.
To make aclaim yourself, you will need: your employer PAYE scheme reference number, the number of employees being furloughed, National Insurance numbers for thefurloughed employees, names of the furloughed employees, payroll or employeenumber for the furloughed employees if they have them, your Self Assessmentunique taxpayer reference, corporation tax unique taxpayer reference, companyregistration and or employer name as appropriate.
You'llalso need: the claim period (start and end date), amount claimed per the minimum furlough period of three consecutive weeks, yourbank account number and sort code, your contact name and your phone number.
Youshould make sure you have this information ready before you access thesystem to make a claim.
Step three – calculating your claim.
The amount youshould use when calculating 80% of your employees wages is regular payments youare obliged to make, including: regular wages you pay to employees, non-discretionary overtime, non-discretionary fees, non-discretionarycommission payments, piece-rate payments.
You cannot include the following whencalculating wages: payments made at the discretion of the employer or a client, where the employer or client was under no contractual obligation to pay, including: tips, discretionary bonuses, discretionary commission payments, non-cash payments.
If your employee receives non-monetary benefits includingbenefits in kind, for example a company car, these shouldn't be included in thewage claimed for under the scheme.
If you provide the salary sacrifice schemethrough your company (including pension contributions) that reduces an employee'staxable pay, they shouldn't be included in the wage claimed for under this scheme.
As previously mentioned, employers canclaim 80% of gross wages for each furloughed employee, up to a maximumof two thousand five hundred pounds per month, the associated employer nationalinsurance contributions and pension contributions up to the level of theminimum automatic enrollment employer pension contribution on furlough pay.
Theway you should work out eighty percent of your employees usual wages isdifferent depending on the way they're paid.
The example that follows is forfixed pay employees.
If you have one or more employees whoare paid a different amount every pay period, then there is a differentcalculation.
You can find out more about the variable pay calculation on GOV.
UK.
Ramesh started work for AB Limited in 1997 and is paid a regular fixedmonthly salary on the last day of each month.
He is also auto enrolled into the workplace pension.
Ramesh agreed to beplaced on furlough from the 23rd of march 2020, receiving 80 percent of hissalary.
First of all we'll look at how to workout the total amount being claimed for Ramesh in the furlough period.
His grosssalary for February 2020 was £2, 400 – February being the last monthlypay period before the 19th of March 2020.
We need to work out his daily rate ofpay by dividing 2, 400 by 31 (number of days in March) which equals£77.
42.
The furlough period we can claim for in Marchwill be from the 23rd of March to the 31st of March – a period of nine days.
Thenumber of days in the furlough period is nine, so we can multiply the daily ratefor Ramesh by 9 which equals £696.
78 We then need to multiply this amountby 80%, which equals £557.
40.
Employers can claim 80 percent of wagesfor each furloughed employee up to a maximum of 2, 500 pound per month.
Thenext step is to work out the maximum amount for comparison.
The guidanceincludes daily maximum figures to use when the claim period is not a multipleof whole weeks or months.
The daily maximum figure for March is £80.
65, i.
e £2500 divided by 31.
The number of days in the furlough period is nine, sowe multiply £80.
65 by 9, which equals £725.
85.
AB Limited can claim the lower of 80% of Ramesh's gross salary (pro-rata) which is£557.
42 or monthly maximum (pro-rata) which is£725.
85.
AB Limited will therefore make a claimfor gross pay in the furlough period of £557.
42 Next we need to work out the employersnational insurance contributions that can be claimed.
The monthly gross pay forRamesh is £2260.
65 of which £1703.
23 relates to the period 1st of March to the 22nd ofMarch, and is therefore funded by AB Limited, and £557.
42funded by CJRS for the period 23rd of March to the 31st March.
The employer NIC due on the total gross pay of £2260.
65 is £212.
75.
This is split on a daily basis to the furloughperiod to work out how much AB Limited can claim.
To convert this into adaily rate, we need to divide £212.
75 by 31 days in March, which is £6.
86.
The amount of employer national insurance contributions in the furloughperiod, nine days, is therefore £6.
86 multiplied by 9 furlough days, which£61.
74.
AB Limited isn't topping up Ramesh's wages, so thisfigure doesn't need to be reduced.
AB Limited can therefore claim £61.
74for employer NIC due on the employees March pay.
The total grant for employerNIC cannot exceed the total amount of employer NIC that they be limitedis due to pay.
Now we'll work out the grant foremployer pension contributions.
The monthly lower level of qualifyingearnings of £512 for March 2020 is to be split based on the number offurlough days in the month, which we know is nine days.
Again we will first workout the daily threshold by dividing the monthly amount of £512 by 31 (number days in March) this equals £16.
52.
We then need to work out the amount the relates to the period 23rd of March to the 31st of March.
So, we need to multiply the dailyrate of £16.
52 by 9 furlough days, which equals £148.
68.
The gross pay Ramesh receives for the nine day furlough period is £577.
42.
The minimum level of auto-enrolment pensioncontributions on the £577.
42 furlough pay istherefore gross pay for furlough period £577.
42 minus £148.
68 (period 23rd of March to the 31st of March).
This equals£408.
74.
We then multiply this by three percent, minimum percentage ofemployer pension contributions.
£408.
74 x 3% = £12.
26.
AB Limited can claim £12.
26 towardsthe employer pension contributions for March.
This is the lower of £12.
26or the employer pension contributions due on furlough pay under the terms ofthe pension scheme.
AB limited claims a total of £631.
42 from the CJRS for the employee in March.
This is made up of£577.
42 for gross pay, £61.
74 towards employer NIC and £12.
26 towards employer pensioncontributions.
There's a claim calculatorwhich will help you check your claim.
If you have an agent, including file-onlyagents or payroll providers, they should be able to assist you with calculatingyour claim.
Step four – making your claim.
Before you start your claim, please makesure you've gathered all the information required in steps 2 & 3.
To access thesystem on GOV.
UK, you or your agent will need to have a Government GatewayID and password and active PAYE enrolment.
It's worth noting that aclaim needs to be done in one session as there is no save or return option.
Thesession will also timeout after 30 minutes of inactivity.
By making it claimyou agree that; the grant you receive can only be used to pay your employee salary, the employer NI contributions and pension contributionsyou must pay relative to the salary paid to your employee and you'll return anygrants back to HMRC immediately if you're unwilling or unable to use it topay your employees salary, employer national insurance contributions and pensioncontributions.
If you have fewer than 100 furloughed staff you will need to inputinformation directly into the system for each employee.
If you have a hundred ormore fellow staff, you will need to upload a file with information for eachemployee.
We will accept the following file types: .
XLS .
xlsx .
CSV .
ODS.
The onlineservice will take you through a series of steps.
You will need to confirm thatyou have furlough your employees.
Then you will need to input the informationabout your organisation, which you prepared in step 2.
After this you willneed to confirm the amount of the claim, split into the total amount to be paidto furloughed employees and the total pension and national insurancecontributions that you prepared at step 3.
Before you submit the claim, you willalso need to: confirm your employees details, enter your UK bank details andyour address.
Once you've submitted the claim, you will see a confirmation screenwhere a claim reference number will be provided.
Print the confirmation screenor note down the claim reference number provided.
You will not receive an emailconfirmation if you are submitting the claim yourself.
It's your responsibilityto check the accuracy of your claim.
If you're using an agent, ask them to note down and show the calculations that form the basis foryour claim and the claim reference number provided.
They will not receive an emailconfirmation but they can print the confirmation screen.
To ensure the fundsare paid as quickly as possible to you, your agent should input your bankdetails into the system, not theirs.
Step 5 – After submitting your claim.
HMRC will verify your claim and youwill receive the funds in six working days.
To help us support as manybusinesses as possible, please do not contact HMRC until six working days havepassed as we will not be able to help you with your claim.
Keep hold of yourclaim reference number, one way of doing this is to print out the confirmationscreen.
You should retain calculations that form the basis of your claim incase further information is required by HMRC.
Tell your furloughed employeesyou've made a claim and they don't need to take any action.
Employees shouldn'tcontact HMRC to check the status of a claim as we won't be able to providethem with that information.
Only contact us if you cannot find what you need onGOV.
UK or through our web chat facility.
This will leave our lines openfor those who need our help most.
Thank you.
For any further information pleaseread the guidance on GOV.
UK.
Here's a summary of what I've coveredtoday: a step-by-step guide taking you through the five sections, step one – essential information, step two – before you make your claim, step 3 – calculating your claim, step four – making your claim, step 5 – aftersubmitting your claim.
We will of course keep you updated with the latestposition.
Our full range of help and guidance can be viewed online from yourmobile tablet or PC at any time.
Information on a range of othergovernment's support for businesses to help manage the impact of coronavirus(COVID-19) can be found on the HMG business support page, this includesinformation on the Coronavirus Business Interruption Loan Scheme, business ratesholiday for nurseries and support for retail, hospitality and leisurebusinesses.
If you need extra support, the web address is on screen.
For example, ifyou have a disability, a mental health issue, or you do not speak English thankyou for listening.
Stay safe and stay well.
.
