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furloughed employees -

does the employer have to pay or not before making a claim?

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apologies if this has been asked before or if i am being naive. Does anyone know if the employer must pay the salary to the furloughed employee before making claim to be reimbursed by the Gvnt, or can the employer not pay salary and then  make a claim for payment by Gvnt? i am reading the HMRC guidance but is not clear and they are using conflicting temrs (reimbursemnt, expect grants to pay employees, etc). supposedly this  scheme is for employers that send employees home because they cannto pay them. thanks.

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By WuTangFinancial
27th Mar 2020 10:36

Yes, payroll needs to completed as per usual, the grant covers the backdated claim in this case.

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Replying to WuTangFinancial:
neand
By neanderthal
27th Mar 2020 10:39

thanks. so, does this man that salaries on the FPS per normal but releant employees are shown on the FPS as furloughed. However, this doesnt answer my query if the employer has to actually pay the salaries before making a claim from the Gvnt.

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By Not Anonymous
27th Mar 2020 10:55

neanderthal wrote:

thanks. so, does this man that salaries on the FPS per normal but releant employees are shown on the FPS as furloughed. However, this doesnt answer my query if the employer has to actually pay the salaries before making a claim from the Gvnt.

How can you show that on an FPS?

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Routemaster image
By tom123
27th Mar 2020 10:43

Depends if you are Wetherspoons or not?

General expectation is pay first and reclaim later, using government loans to bridge the gap

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By bernard michael
27th Mar 2020 11:00

tom123 wrote:

Depends if you are Wetherspoons or not?

General expectation is pay first and reclaim later, using government loans to bridge the gap

According to the HMRC guidance (unless it's changed since Monday) it states
Your employer could choose to fund the difference between this payment (80%) and your salary but doesn't have to

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By tom123
27th Mar 2020 13:10

Agreed, but I thought the question was about timing rather than amount,

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A Putey FACA
By Arthur Putey
27th Mar 2020 11:26

I think the answer is, put the agreed gross pay (80% or 100% or anything inbetween) into payroll and file RTI as usual.

If the employee separately agrees not to receive part of their net pay to help the employer out while he waits for he money, the employee will become a creditor and they get paid back when the scheme pays out. Clearly there is the risk of the employee not getting the money back for whatever reason, and I have no idea whether they would be a preferential creditor in such circumstances.

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Replying to Arthur Putey:
neand
By neanderthal
27th Mar 2020 12:07

the question is though, if the employer pays the employee normal salary, how will the employer prove that the employees were actually furloughed and they didnt work?
and how will the employer prove that he had been affected by covid if he carried on making payments to furlougjed employees? the gvnt may say no claim because you had no business problems by covid since you pai employees as normal.

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By WuTangFinancial
27th Mar 2020 12:49

"the question is though, if the employer pays the employee normal salary, how will the employer prove that the employees were actually furloughed and they didnt work?"

There needs to be amendment in the employment contract (letter/agreement) between employer and employee stating furlough and the conditions. There is no onus on the employer to prove anything.

"and how will the employer prove that he had been affected by covid if he carried on making payments to furlougjed employees? "

Irrelevant since the govt has introduced this scheme to all companies.

"the gvnt may say no claim because you had no business problems by covid since you pai employees as normal."

Read the guidance, they encourage employees to pay their employees and claim retrospectively.

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Replying to neanderthal:
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By WuTangFinancial
27th Mar 2020 12:50

"the question is though, if the employer pays the employee normal salary, how will the employer prove that the employees were actually furloughed and they didnt work?"

There needs to be amendment in the employment contract (letter/agreement) between employer and employee stating furlough and the conditions. There is no onus on the employer to prove anything.

"and how will the employer prove that he had been affected by covid if he carried on making payments to furlougjed employees? "

Irrelevant since the govt has introduced this scheme to all companies.

"the gvnt may say no claim because you had no business problems by covid since you pai employees as normal."

Read the guidance, they encourage employees to pay their employees and claim retrospectively.

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