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Furlough and paying in arrears

Furlough and paying in arrears

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I have a staff memeber who gets paid variable amounts on a weekly basis, who started part way through the  19/20 tax year. The employee gets paid a week in arrears. Will this affect the furlough amount I can claim? Should I claim for the first day they got paid or the day they started. ie so she has only been with us 2 months so in the calculator I calculate the amount she got paid up to the date she was furloughed, but as pay is in arrears should I take that week into account when calculating her earnings or take it from the first pay day. It does affect the amount I can claim.

Thanks in advance

Alig

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By memyself-eye
28th Apr 2020 19:06

You paid her up until the date she was furloughed?
By its' nature that payment was 'in arrears' - most are.
Her pay was from the day she started to the day she was furloughed- those are your numbers to calculate 80% of average pay.

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Replying to memyself-eye:
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By unearned luck
28th Apr 2020 19:27

Dear OP

For the avoidance of doubt, it is the pay for the work done in the period memyslef-eye gives if the furloughing commenced before 6/4/20, not the sums the employer paid in that period.

if the furloughing started on or after 6/4/20 then the reference pay is that paid for work done from commencement to 5/4/20. This is likely to be, give or take a day or two, all of 2019/20 plus week 1 of 2020/21.

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Replying to unearned luck:
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By Wanderer
29th Apr 2020 01:35

Struggling with that point.

7.2(a) wrote:
(a) the average monthly (or daily or other appropriate pro-rata) amount paid to the employee for the period comprising the tax year 2019-20 (or, if less, the period of employment) before the period of furlough began,
Shouldn't the word 'paid' be 'payable' in order to put it beyond doubt?
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By alig
28th Apr 2020 22:33

So as she gets paid a week in arrears and she started 24/2/20 but her first pay date was 6th March (for the previous week) I should take it from 24/2 to the 23/3 when she was furloughed?
A slight twist to it, she doesn't work every day, 5 days a week but sometimes this includes a Saturday, so part of the week from 23/3 to 28th which is the end of the next Pay Period assuming she worked Monday 23rd as normal but had Wednesday off so I would then calculate 4/5ths of her pay for this period for the furlough aspect

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By PandoraSleeps
29th Apr 2020 12:05

I spoke to an HMRC technician about this issue. I have a payroll where all hourly paid staff are paid a month in arrears, e.g. in February payroll for January hours. For starters in 2019/20, if you take the HMRC guidance to the letter you would be taking (for example) pay for 6 months and dividing by 7 months! The technician told me to use an approach that would give a fair average for 2019/20 even if this is not in accordance with the letter of the guidance, and keep notes on what I had done. The guidance doesn't cover all situations and the average calculation has to represent a fair average pay.

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