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Coronavirus Jobs Retention Scheme updated guidance

Coronavirus Jobs Retention Scheme updated guidance has been published

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Updated guidance on the Coronavirus Jobs Retention Scheme has been published, answering many of the questions raised on AWeb over the last few days. The new expanded guidance can be found at https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus...

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By Carl London
27th Mar 2020 06:48

Thanks for the link. Unfortunately it does not mention directors.

Although, another HMRC webpage https://www.gov.uk/government/news/chancellor-gives-support-to-millions-...

states:

'Those who pay themselves a salary and dividends through their own company are not covered by the scheme but will be covered for their salary by the Coronavirus Job Retention Scheme if they are operating PAYE schemes.'

So, can we now conclude this is OK for single person limited companies if they are not earning income for the company? Yes the may have some 'director duties' such as ensuring tax filings are taken care of, but I have quite a few ltd co clients who have zero revenue now and for the foreseeable future.

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Replying to Carl London:
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By bosclibby
27th Mar 2020 07:35

Let's hope this is correct but they may have to be able to prove they are doing no company work whatsoever which may be difficult. Be good if this was clarified by Govt as, in the circumstances, it seems unfair and for several of our clients would mean little or no help where help is needed. Likely to be relatively low assistance anyway as most of these people would be on low pay + divs route I imagine...albeit that could be on the way out in the coming year or two listening to the Chancellor!

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Replying to bosclibby:
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By acceje
27th Mar 2020 07:42

I had an email last night from HMRC Business Health & Support that states “Directors of their own company paid through PAYE, may be able to get support using the Job Retention Scheme.”

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Replying to acceje:
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By Carl London
27th Mar 2020 07:54

acceje wrote:

I had an email last night from HMRC Business Health & Support that states “Directors of their own company paid through PAYE, may be able to get support using the Job Retention Scheme.”

A similar comment is also on the bottom of the SEISS page here - https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-...

"If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme."

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By Sanjeev Nanda
27th Mar 2020 06:53

Thank you for posting this. There has been considerable confusion regarding this topic in the last few days. Although the results are less than desirable, such as no relief for freelancers and the unorganized sector, more guidelines will help in abating any misinformation going forward. Hopefully there are more to come in the arduous weeks ahead.
~Sanjeev Nanda

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Should Be Working ... not playing with the car
By should_be_working
27th Mar 2020 08:58

I wonder what would happen in the case of a director whose salary was increased to, say, £3k pcm (from £719) with effect from 1/3/20? Will there be provisions to 'average' recent pay instead or will the system just accept the£3k and pay out based on that level?

What if the pay, of any employee, increased on 1/4/20 just as part of a regular annual uprating?

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Replying to should_be_working:
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By more rain
27th Mar 2020 09:33

Full time and part time employees

For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.

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Replying to more rain:
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By AJBetts77
27th Mar 2020 09:39

Hi More Rain,
Where did you get that from?
I see the bit about 28th Feb salary, but where did you see about bonuses and commissions - or are you saying that is implied?

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Replying to AJBetts77:
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By more rain
27th Mar 2020 09:45
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Replying to AJBetts77:
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By AJBetts77
27th Mar 2020 09:52

Scrap that, have found where it says that, must have skim read it in my haste to answer 300 clients at once!

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Replying to more rain:
Should Be Working ... not playing with the car
By should_be_working
27th Mar 2020 09:44

I see - that does make sense.

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Replying to more rain:
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By JAMAccounting
27th Mar 2020 09:48

So what if an RTI was resubmitted for February at an increased rate?

So many unanswered questions...

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Replying to JAMAccounting:
By northernmonkey
27th Mar 2020 10:43

Pretty certain that'd be fraudulent!

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Replying to more rain:
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By anulka12
27th Mar 2020 22:32

What about overtime?
If I have full time salaried employees and every month they do overtime...is the 80% to be calculated on their basic salary only?or basic salary plus overtime?

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By colinwain
27th Mar 2020 09:38

Compare and contrast 2 directors, both with salary of £8600 pa:

Director 1 - on an annual payroll scheme, each April payroll includes £8600 for him.

Director 2 - gets monthly payslips of £719.

HMRC's guidance is:

If you’ve been employed for a full year, employers will claim for the higher of either:
•the amount you earned in the same month last year
•an average of your monthly earnings from the last year

Claim for Director 1 = 80% x £8600, restricted to £2500
Claim for Director 2 = 80% v £719

Can this be correct?

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Replying to colinwain:
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By more rain
27th Mar 2020 09:50

You are calculating the pay based on the guidance for Employees whose pay varies.

If the director is on £8600 PA their pay is not varying and therefore would you not use the following guidance;

For full time and part time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%. Fees, commission and bonuses should not be included.

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Replying to more rain:
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By colinwain
27th Mar 2020 10:09

so the Director who is on the annual scheme can have no claim for him, as he had no salary in February?

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Replying to colinwain:
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By JAMAccounting
27th Mar 2020 10:22

""employers will claim for the higher of either:""
•the amount you earned in the same month last year
•an average of your monthly earnings from the last year

The £8600 annual scheme would average to the £716 monthly earnings and claim on that.

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By blox
27th Mar 2020 09:53

Confusion again. From https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus...

"The scheme is open to all UK employers that had created and started a PAYE payroll scheme on 28 February 2020."

And then, few paragraphs below:

"You must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account."

So does this mean that employee, who had PAYE scheme throughout the year, but no RTI was run at the end of February 2020, (although still employed with the employer) still qualify ? I have a client that has a company with 3 employees (all family) who was already struggling in February so no RTI was run. Would anybody know if they qualify?

ADDED: Looking at the post above, with a single director paid in April only, they should! All their salaries were £1200, £1089, £1000 and RTI was run for Apr - Jan period, so for 10 months, which makes their income £12,000, £10,890 and £10,000. This gives the monthly average (divided by 12) of £1000, £907.50 and £833, and 80% would be £800, £726 and £666.

Would this be correct?

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Replying to blox:
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By JAMAccounting
27th Mar 2020 09:50

I'd suggest they would qualify on the basis of this line:

"If you’ve been employed for a full year, employers will claim for the higher of either:
•the amount you earned in the same month last year
•an average of your monthly earnings from the last year"

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Replying to JAMAccounting:
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By blox
27th Mar 2020 09:53

I will bring them the cautiosly good news ! Thanks.

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Replying to JAMAccounting:
Psycho
By Wilson Philips
27th Mar 2020 10:03

If that is correct, then the director would need to be furloughed for only one month. In fact, if the director was paid £8k in March last year, and the claim can be backdated to 1 March, would there be any need to furlough at all?

Confused

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By Death
27th Mar 2020 10:29

"You must pay the employee all the grant you receive for their gross pay, no fees can be charged from the money that is granted. " - does that mean employer can delay payment of wages until claim is received????

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Replying to Death:
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By SarkaT
27th Mar 2020 12:45

I did not read it like that. That section, imho, just says that the employer cannot keep any of the money to themselves. Considering that just above it says claim can be made only after or just before payroll is run, I should think not. Also, a claim can only be made every three weeks, so with weekly payrolls, you probably could not wait.

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By msu677
27th Mar 2020 10:39

Am I being overly concerned about the - 'per the minimum length of furloughing of 3 weeks' sentence in the how to make a claim section of the guidance? I was not expecting there to be a minimum period and I can only assume from it, that if a client wants to restart their business within the 3 weeks of furlough they will have to make a decision on whether to wait or to lose out on the refund.

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Replying to msu677:
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By SarkaT
27th Mar 2020 12:46

no idea, but a good question!

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By Graham Coster FCA
28th Mar 2020 00:05

The guidance issued by HMRC is clearly not complete and they say that additional information will be supplied before the Scheme starts. The Guidance has some minor inconsistencies.

One item of data missing from the information required for the claim is the name of the employee. I suspect that this is vital for any subsequent audits by HMRC.

I have seen other guidance from the Government change the day it was issued, so expect more details and some changes.

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By [email protected]
20th Apr 2020 16:49

Hope all team members are well.

Have a think about this scenario.... we hired several people in February and March of this year, however company policy is anybody who joins the company after 25th of the month is rolled onto the following month. For the admin side great news & it’s been like this for a long time.

What this initially meant was we hired several people that couldn’t be furloughed, but there was a sigh of relief when the chancellor revised his dates…. But was my sigh a little premature?

Problem arises when people had to have been on an RTi prior to 19th March. So anyone who started 25th Feb 2020-19th March 2020, whilst qualify in theory would not be on the RTi until after the end of March, the following payroll period. The platform that has gone live today, doesn’t allow the entry of the number of people higher to those of Feb 20 RTi submission. I appreciate this is one check they are currently doing but it doesn’t work for my situation… this affects 14 colleagues in just one business… what to do?!

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