Would anyone care to support or to gainsay the proposition that the ICAEW has made an error in Illustration 1 of this guidance:
The illustration as it appears in the guidance as at the time of posting is pasted below.
The guidance is I think correct to say “Plus employers' NIC on this amount”, but this amount is £1,600 and the NIC on £1,600 is £122.
Thus the claim should be for £1,722 and not £1,777. The net cost to the employer is £455 and not £400.
EXTRACT from the guidance:
X Ltd employs Mr A at an annual salary of £24,000, so £2,000 per month. Mr A has opted out of auto enrolment.
Each month, Mr A currently receives net pay of £1,655 which is after deducting PAYE of £191 and employees NIC of £154. On this salary, the employer pays employers' NIC of £177.
The available grant for the employer is the lower of
(a) 80% of £2,000, and
Plus employers' NIC on this amount
So X Ltd claims a grant of £1,600 plus £177 = £1,777.
The net amount of cash required by X Ltd to furlough Mr A based on maintaining the existing salary is £2,000 + £177 - £1,777 = £400 per month.
It is a matter for employment law whether the employer is actually required to pay this top up. Employees and employers can agree to a different arrangement during the furlough.