Streamlining claims for furloughed employees

25th May 2020
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The latest updates on the Coronavirus Job Retention Scheme

The HMRC's Coronavirus Job Retention Scheme ("CJRS") was announced on 20 March 2020 and opened for claims on 20 April. Originally due to end on 31 May, then 30 June, the scheme has now been extended for the second time. The Chancellor announced on 12 May that it would continue without change until the end of July 2020.

It will remain in place and available to all sectors through to the end of October 2020, but from August there will be greater flexibility. Employers currently using the scheme will be able to bring furloughed employees back part-time. Employees will continue to receive at least 80% of their wages subject to the £2,500 per month cap, but employers will be asked to 'start sharing the cost' of the scheme. 

Full details will be available by the end of May. For more essential reading and further HMRC guidance on furloughing employees and the new job retention scheme, see here.

Furloughing employees

Furloughing employees can be tricky with traditional systems. The calculation of wages is based on any regular payments you are obliged to pay, including past overtime, fees and compulsory commission payments. You should NOT include discretionary bonus, commission payments and non cash payments. What's more, employers are obligated to report these payments to HMRC in order to claim via the online portal. This could be tricky if claiming for several employees.

Thankfully, there are a number of options available in KeyPay that can assist users with furloughing employees - streamlining both the calculation of wages, and reporting to HMRC.

  1. If you wish to keep furloughed employees separate in the payroll you could set up a new location which can act as a separate department to allocate the employees to.
  2. You can set up a new pay category and call this, for example '80% furlough salary' and pay furlough employees under this pay category.

KeyPay's furloughing report

If you go with option 2, you're able to generate a report based on the pay category you've used for your furlough payments. KeyPay allows you to create a partially completed template report that can be used to claim via the online portal, reducing any manual efforts and making it super easy to claim for furloughed employees.

KeyPay furlough report

The HMRC online portal is open and is designed to be self serve with guidance in place. Please click here for HMRC's guide to claiming.

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