Commercial Production Editor AccountingWEB.co.uk
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Furlough claims put agents through baptism of fire

​The past few weeks have been a “real baptism of fire” for AccountingWEB members, said tax expert Rebecca Benneyworth in our latest Coronavirus Q&A webinar.

4th May 2020
Commercial Production Editor AccountingWEB.co.uk
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Furlough portal puts advisers through baptism of fire
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Since Monday 20 April, accountants have been helping clients in their thousands with the new business support schemes and putting claims through the recently opened furlough claim portal.

The niggles and nuances of the claims have been so extensive that at members’ request, AccountingWEB held two consecutive Q&A webinars on the subject on 22 April and 29 April.

The 100-employee cut-off for uploading files to claim in bulk has tormented many small business advisers, who have had to enter the details of each employee manually into the system, said payroll expert Kate Upcraft in last week’s session: “They’d rather be spending their time supporting their business then keying in 100 records, particularly for weekly payrolls.”

Besides being “a huge amount of work of keying in each week,” accountants are more prone to make mistakes when keying information manually. “When you start cutting and pasting, things like that, that's when you make a mistake or chop the end of a national insurance number. Often, something will go wrong,” she said.

Upcraft went through the most significant changes of the previous week, including the 19 March cutoff date, which is still causing problems for many accountants. Some claims filed before the 19th with payment dates for 31 March have been rejected. “There is still some issue with the backend not quite understanding there's a difference between the payment date in the file, which could easily be after 19 March, and the filing date,” she said.

Upcraft also warned about RTI submissions: “It is now becoming obvious that clients didn’t pay people towards the end of March but RTI submissions were sent. That causes havoc as far as universal credit is concerned.

“There’s been a disconnect between the clients who know whether they've paid and the agent who wasn’t told anything else and assumes as normal that people have been paid. If you think you’ve got clients with cash flow difficulties, check before you send the FPS.”

Audience Q&A

As usual, Benneyworth and Upcraft also answered the questions asked by the viewers. These included the following:

Can you amend your CJRS claim once youve hit submit?

Upcraft: No, it’s very difficult to do. But I think we will get to a point where we will look at the four months as a whole. So, if you had somebody that you missed last month or somebody you thought was furloughed, but then they had to come back into work after two weeks, you can adjust it in the next claim.

How do I calculate the correct furlough reference pay?

Upcraft: There are two scenarios. The first one is for those on a fixed rate, whose pay should be stable and based on what was going on in February. The second one is those who have variable pay. You then have to look back to the same week or month last year to see what they were earning then.

If you choose contractually to give them a pay rise or an uplift in national minimum wage, that’s your decision. But from a furlough perspective, you have to choose whether you consider things part of regular wages and have an evidence trail as to why you came to that decision as to what you've included or excluded.

If you’ve effectively paid less than the guidance says you should have done, you need to give that extra money to the employee because if you’ve claimed it and received it, it’s got to be passed on, even if it is in a later period.

If an employee’s hours reduced part way through last year and are on variable hours, should their furlough pay be based on the new hours or on the average for last tax year?

Upcraft: The guidance simply says higher off same period last year, or average for 19/20. So you're allowed to go for whichever is the higher value and pay on that basis.

Can you pay an employee less than the 80% if you agree with them the amount?

Upcraft: If they want to be in the scheme, it has to be 80%. You can agree to furlough somebody on less than that, but you can’t claim for them. If there has been a cashflow issue and you were planning to pay them 80%, but you can't until the money comes in then it’s acceptable to pay for instance 70% in March and wait until the money comes in to pay the rest, but you can’t just not pay them enough.

What can I do if a member of staff doesn’t have a national insurance number?

Upcraft: Last week HMRC offered the facility to do claims over the phone that you can use if you have a missing NI number, so if the claim is for a small number of employees, you can do that. 

For large claims, you might want to wait until there is another way to upload everything. Remember that the portal is not closing on 30 June, that’s just when the furlough period ends at the moment. So you can wait and do it afterwards.

What’s the best way to deal with bank holidays during the furlough period? Do they count as part of the basic 28 days annual holiday entitlement?

Upcraft: Yes, if it’s part of your terms and conditions that people have 28 days holiday, those 5.6 weeks or 28 days include bank holidays, you don’t get them on top. 

So if people are taking bank holidays as annual leave during this period, then they are using some of their holiday entitlement and they are entitled to be paid 100% for those holiday days, which you won’t be claiming back because that will be over and above the furlough amount, but you’re getting 80% of that day paid back to you.

People do need to be mindful of terms and conditions still take precedence here and employment law hasn’t gone away.

A client is both employed and self employed. SE income for 18/19 was just over 50%. She is furloughed by her employer - can she claim the SE grant as well as long as she doesn't receive more than £2,500 per month?

Benneyworth: The two operate independently of each other. So if her self-employed income meets the conditions for that self-employed income support scheme, then she will be invited to claim from the middle of May onward. But at the same time if she’s furloughed, then she is also entitled to furlough pay, so she can get both. And the two don’t interact at all.

As an employer, if I have work for my staff, but two members of staff can’t come into work due to looking after children/elderly relatives, can they continue to stay on furlough or do they have to take unpaid leave? 

Upcraft: Yes, you can be furloughed if you’ve got caring responsibilities. The requirement is that you’re not working.

Benneyworth: It is really a sort of employer and admin point and if they're prepared to give extra hours to other staff. It's not costing them extra because those employees are furloughed, and that furlough is funded. If they're happy to do it, then that's fine.

Broader subjects

Though our past two Q&A webinars have focused primarily on the job retention scheme, the issues accountants are encountering with coronavirus aren’t just to do with the technical requirements of different business support schemes. One of the questions also concerned how to charge for all the extra work associated with researching and applying for different claims. 

These decisions are open to the interpretation and judgement of individual practices. For her part, Rebecca Benneyworth said she had added a “modest charge” for CJRS claims to her usual fixed fee service. 

“There will be a modest charge for it, but it won’t be as much as what it costs me in staff time to do it. I'll probably look at the average time it's taken to do the claims and then go from there,” she said.

In response to audience feedback, this week’s webinar will focus on Bounce Back and Business Interruption Loans, business recovery strategies and the Self Employed Income Support Scheme with Rebecca Benneyworth again and Julie Palmer from Begbies Traynor.

Replies (9)

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By janet.gee
05th May 2020 09:53

Very helpful as always with anything Rebecca is involved with, thankyou.
However, the answer to:
" What can I do if a member of staff doesn’t have a national insurance number?"
is not quite correct in that , yes HMRC do give a phone number that in theory, offers the facility to do claims over the phone .
However, all the HMRC agent does is to take your phone number , PAYE references etc and tell you that someone will phone back ' within 72 hours'.

I have now had three attempts over the last 14 days to resolve this and not received one call back from HMRC. I appreciate they are very busy at the moment. But, my client has a payroll of 19 employees, 2 of whom are under 16 and therefore, have not yet been issued with an NI number. Wages for April have had to be paid but the furlough claim cannot be made. So - just a warning that the solution offered by HMRC does not actually appear to be working.

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Replying to janet.gee:
By CazzyT
05th May 2020 13:18

I understand this situation is frustrating.
I think my clients would prefer me to submit the claim minus the 2 you mention so at least they are funded for the other 17 employees.
Then when HMRC respond or there is an alternative work around, process the other 2.

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Replying to CazzyT:
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By janet.gee
05th May 2020 19:04

Thanks. I was thinking of doing that for the reasons you mention.

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By Mr J Andrews
05th May 2020 09:54

Still doesn't answer my query - which everyone seems to avoid. I'll ask again for help.
Dick , groundsman at our Bowls Club is on furlough. Bowls Club is going bust with no revenues from the greens , cafe and odd functions. Meanwhile the greens are becoming overgrown, to say the least and will cost a good deal to [ eventually ] put right with money from goodness knows where.
Dick has kindly volunteered to spend a few hours as and when to keep the greens from further decline as a gesture of goodwill to the Bowls Club members.
He would not be paid . But is this gesture considered a prohibitive service to the Club ?
Surely not what Chancellor Sunak intended ?

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Replying to Mr J Andrews:
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By agillies
05th May 2020 10:50

There is scope to do essential work under furlough- This appears to be essential work and also is not generating income. Also you could make argument that it is simply voluntary work.

Also worth checking if they can get £10,000 rates grant.

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Replying to Mr J Andrews:
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By gillybean04
05th May 2020 19:20

He can't provide any service to or on behalf of his employer.

It seems to be exactly what they have intended, given their guidance is anyone working reduced hours or reduced pay would not be eligible for the scheme and that employers are free to allocate critical business tasks to staff who are not furloughed.

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By agillies
05th May 2020 10:46

Thanks. Some good issues covered. Payroll over 10 should be allowed on excel as someone has to pay for this wasted time and effort.

On separate issue If client has 7k self employed income and 10k state pension they appear to be ruled out of 80% support as SE income is under 50% of income. Is there a specific rule or link that covers the state pension to clear that up as I could not find it when I looked

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By gillybean04
05th May 2020 19:28

"If you’ve effectively paid less than the guidance says you should have done, you need to give that extra money to the employee because if you’ve claimed it and received it, it’s got to be passed on, even if it is in a later period"

That only applies where the sum of money that was less than 80% was paid between 1st March & 18th April and the further amount is paid before you make the claim.

Outside of those limitations, if you pay below 80% of the reference salary then their wage is not a qualifying cost under the rules of the scheme. As per paragraphs 7.11 & 7.12 of the directions.

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By Lesleyclarkuk
18th May 2020 12:07

Thank you this is very helpful! However I have just taken over a company’s accounts and discovered that the last furlough claim was incorrect - under claimed! Will I be allowed to input a claim period already claimed for in order to claim the difference? Or should I just add the last period’s underclaim to this period? Though am sure it will flag up at HMRC. Thank you!

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