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.
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 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.”
As usual, Benneyworth and Upcraft also answered the questions asked by the viewers. These included the following:
Can you amend your CJRS claim once you’ve 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.
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.