Owner Kate Upcraft Consultancy Ltd
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Coronavirus job retention scheme: Get the details right

The guidance for employers on the coronavirus job retention scheme (CJRS) was updated on 20 April and 27 April with details on eligbility, and this article has been amended based on that guidance as well as the earlier updates issued throughout April, to cover all the key points about this scheme.

30th Apr 2020
Owner Kate Upcraft Consultancy Ltd
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Coronavirus Job Retention Scheme details - 30 April update

Who can claim?

All employers can benefit from the scheme, even owner-managed businesses. On 17 April Rishi Sunak, Chancellor of the Exchequer announced that CJRS grants would be available to pay furloughed employees until the end of June. This extension is widely understood to be put in place to avoid businesses having to start redundancy processes to take effect from the end of May.

The government wants the support to be as inclusive as possible. There is no conditionality related to having sufficient funds which for example have been applied to the business interruption loans. However, the employer must have set up a PAYE scheme before 19 March 2020, enrolled for PAYE online and have a UK bank account.

Owner-managed businesses can make a claim from the CJRS, effectively they will furlough themselves, but see comments on directors below.

The following employers would therefore qualify:

  • Businesses
  • Charities and not-for-profit organisations
  • Individuals employing domestic staff (4 April update)
  • Public sector organisations (see below re: public funding)

Which employees?

To reclaim a CJRS grant from HMRC, the employer has to designate employees as furloughed (essentially a period of paid leave when they cannot work) other terms and conditions of employment continue unless these have been varied too, (see How to Furlough below).

Whilst furloughed staff can’t do any work for the employer that furloughed them, they can undertake training, work for other unconnected employers (see Direction para 6.2), work on a self-employed basis (see Directors below) or as a volunteer.

The guidance refers to employees (and occasionally workers). HMRC confirmed on 4 April that the following individuals are covered:

  • Employees on any type of employment contract including zero-hours, flexible, part-time or fixed term
  • Apprentices (make sure you follow the guidance on continuing apprentice training and NMW)
  • Agency workers (including those employed by umbrella companies)
  • Office holders (including company directors) - but only on their PAYE income 
  • Salaried members of Limited Liability Partnerships (LLPs).
  • Limb (b) workers - ie those on PAYE not those who are self-employed
  • Nannies and other domestic staff.

HMRC confirmed on 9 April 2020 the following employees are covered:

  • Unpaid leave - CJRS grant only covers employees who were on unpaid leave on, or after, 28 February 2020 and furlough can only begin when that period was due to expire eg return from sabbatical. Unpaid leave that begin after 19 March 20 cannot be covered under the CJRs
  • Maternity and paternity leave - those on statutory leave can return from that leave and be furloughed.
  • Sick leave - Furloughed employees who become sick can be moved on to SSP, and sick employees can be furloughed, but the CJRS only covers salary (SSP will not be paid by employer as SSP has ended)
  • Shielding - employees who are caring for someone or shielding can be furloughed.
  • Working for another employer - these employees can be furloughed as long as they are doing no work for the employer who is furloughing them.
  • TUPE transfers - where the transfer was made from 19 March onwards it does not affect the ability to furlough and make a claim. 
  • PAYE restructures – where employees are moved to a new PAYE scheme within the business to consolidate two or more schemes after 19 March 20
  • Deemed employees- those subject to the off-payroll rules in the public sector. These individuals can be furloughed and the CJRS can be claimed as long as there is no public money going to the individual from the project them were working on. Note this is a complete change from the previous position  for deemed employees as it was understood.

The following individuals will not be covered:

  • Workers engaged under a contract for services, ie sole traders being paid gross via an invoice. These individuals will have to claim under the self-employed support scheme. 

A business may need to furlough all employees if it has effectively closed down, as in hospitality or non-food retail. However, it can choose to furlough a group of employees, whilst key workers continue to work, or to rotate groups between furloughing and working.

Directors

The HMRC CJRS Direction confirms that company directors can be furloughed as long as they do no work for the business which employs them or for any "person" connected to that business. "Person" in this context includes individuals, charities and other companies. A director/ shareholder who controls a company remains connected with the company while he controls it, so any work he performs as a self-employed individual is treated as indirect work for the company (CJRS Direction para 13.4).  

Paragraph 6.6 the CJRS Direction clarifies that directors may fulfil a duties or other obligations arising by or under an Act of Parliament relating to the filing of company accounts, or provision of other information relating to the administration of the director’s company. Those tasks are not counted as work for the company for CJRS purposes. HMRC guidance has indicated that the director must do no income generating work for their business.

Public sector bodies

The government expects that most public sector bodies will still have the majority of employees working in frontline services.

The 4 April HMRC guidance says: "Where employers receive public funding for staff costs, and that funding is continuing, we expect employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them. This also applies to non-public sector employers who receive public funding for staff costs."

This has generated an area of major confusion as there are numerous employers who receive some sort of public funding even though they are not strictly in the public sector, such as nurseries receiving early years’ funding and universities. The public funding may be only a small proportion of their overall income and the rest of their income has been severely impacted as a result of COVID-19, so some clarity is needed as to whether any public funding causes the employer to be unable to furlough. Let’s hope we can rely on the phrase: where organisations are not primarily funded by the government’ (my italics).

When were they employed?

On 15 April HMRC changed the cut-off date for eligible employees from a start date of 28 February or earlier to 19 March 2020. However, all employees included in the CJRS claim must also have been reported to HMRC in an RTI submission by midnight on 19 March 2020, and must have received some pay in 2019/20.  

HMRC categorically confirmed on 28 April that employees and directors who had reported thier only 2019/20 earnings under RTI after 19 March 2020 cannot be included in the CJRS. This affects all employees, not just directors on annual schemes who tend to pay themselves at the end of March.

Where employees were added to a March payroll retrospectively because they missed the February payroll cut-off date, they may have still missed the 19 March cut-off date if the March FPS was not sent until after 19 March.

It is useful to see in the updated HMRC guidance on 4 April (and expanded on 15 April) that people could be re-employed by their old employer if they had resigned since 28 February and had now had their new job offer withdrawn. However, this is the employer's choice and not an employee's right.

Employers need to be aware of the pitfalls of re-employing former employees. For example is this a new contract with a different salary and benefits package or are they being reinstated on the previous terms? It could make a huge difference to the pay they are receiving and what the employer can legitimately reclaim. Also will this additional period of service give the employee two years of employment and therefore entitlement to redundancy pay in the future or protection from unfair dismissal? If the employer decides not to reinstate everyone who was made redundant in March could there be an issue of discrimination?

The CJRS is effective from 1 March so changes to March payrolls can be made retrospectively to change employees’ status to ‘furloughed’ and reinstate those who had already been made redundant due to COVID-19. However, the PAYE scheme must have been in existence on 19 March 2020 (as per 15 April guidance).
 

How to furlough

The CJRS doesn’t override employment law. The employer must mutually agree with an employee, ideally in writing as it’s a contract change, that the employer is designating them as furloughed (there is no work for them due to COVID-19) and what the employer is planning to pay them whilst furloughed.

Decisions to furlough and the amount to be paid are a contract change. HMRC confirmed on 4 April that this decision must be put in writing to the employee and the employer must retain a record of this communication for five years. However, the employee does nto have to respond to this communication in writing. 

In order to take advantage of the scheme employees should be paid at least 80% of their pay based on their pay in the last pay period before 19 March 2020, tax year 2019/20, or the same pay period last year, whichever is the higher.

Some businesses may choose to continue to pay full salary even though they can only reclaim 80% up to the cap. Other employers may only be able to pay 80% of regular salary or even less than that, until the CJRS grant arrives – but they must retrospectively pay the employee to meet the 80% value or will be in breach of the scheme.

An employee can be furloughed for a minimum of three weeks at a time and the government have extended the scheme to 30 June 2020. The individual could remain furloughed even if the CJRS is not extended, but then the employer would not have any grant funding to cover their wages. HMRC confirmed on 20 April that a furlough period can be extended for a shorter period thant three weeks as long as the initial period of furlough was at least 21 days.

Salary sacrifice

There have been lots of questions about salary sacrifice, particularly in respect to pensions where employees are concerned because of the reduction in their net pay and employers because of the increase in their pension contribution exposure. The HMRC guidance updated on 4 April now says that future contract changes (and that is crucial as a salary sacrifice contract change should be in place before the payday in which it takes effect – so not retrospectively) are acceptable even if the sacrifice hasn’t been in place for 12 months as this can be classed as a lifestyle event.

But this will not affect the  CJRS claim which is based on the last pay day before 19 March. The Pensions Regulator provided new guidance on salary sacrifice on 17 April. It is vital that employers do not further reduce furlough pay to meet a sacrifice agreement or they will be in breach of the scheme.

How much will be paid?

The grant from the CJRS will be the lower of £2,500 per month per employee or 80% of gross regular wages plus employer NIC on the grant figure plus 3% employer pension contributions on the grant figure using the qualifying earnings threshold (see example). On 9 April HMRC confirmed that employers must not claim for the 3% pension contributions if the employee is not in the pension scheme. 

The apprenticeship levy can’t be claimed as part of the CJRS grant.

The 9 April update clarified that any employers' NI covered by the employment allowance cannot be included in the CJRS claim.

When calculating claim values for directors of owner-managed companies you can only consider the salary that has been subject to PAYE, not any dividends paid to those directors.

HMRC has made a calculator available help you work out how much to claim, which on 22 April was updated to deal with employees with varible pay.

Running the payroll

It is important to distinguish between the CJRS grant funding and normal payroll operations which continue, other than that employees won’t necessarily be receiving their former contractual wages. On 23 April HMRC published guidance on reporting payments from the CJRS under RTI.

To decide how much to pay, employers will need to calculate how much the CJRS grant will cover. The £2,500 cap refers to regular wages as in their last pay period before 19 March (per 15 April guidance), excluding bonuses, fees, "compulsory" commission and tips paid from a tronc. The HMRC guidance update on 4 April confirmed that overtime is to be included, but not discretionary bonuses (including tips not from a tronc) and commission payments, nor non-cash payments.

For an individual with variable pay, such that the last pay period before 19 March was not an indicative week or month, their average earnings over 2019/20 or the period of employment during that year can be used. The HMRC calculator has now been updated to cope wiht employees who have variable pay.

The figure that is agreed with the employee to be paid in the period of furlough will treated as normal earnings, subject to all statutory and voluntary deductions, reported under RTI with the remittances paid over to HMRC by the normal deadline.

What is paid through the payroll will not necessarily equal what can be reclaimed from HMRC.

The claim

A standalone portal was introduced by 20 April 2020 to allow the CJRS grants to be claimed. HMRC has published a step by step guide for employers on how to make a claim. For more information on how to claim, see this AccountingWEB article

Repeated claims for CJRS will be required for the same employer if the furlough period is extended. As long as the next claim follows on sequentially by date from the claim before, the CJRS claims can be submitted more than three weeks apart.

On 15 April HMRC confirmed that the employer will have to provide the NI number and name for each employee included in the claim, but the payroll number is optional. However, some employees don’t have a NINO, in which case you should contact the HMRC  COVID-19 Helpline on 0800 024 1222 who can process their claim over the phone.

A major concern is that there may be a requirement to have a PAYE online account in order to make a claim. Thousands of businesses, particularly SMEs that outsource their payroll operation to a tax agent don’t have a PAYE online account. Those businesses will have furloughed employees in March on the understanding, from the initial HMRC guidance, that as long as they had a UK bank account and an operational PAYE scheme that was sufficient to be able to make a reclaim in due course. ICAEW have provided a step by step guide to agent authorisation as it stands at 20 March 2020.

As one amount of CJRS grant will be claimed for a group of employees you need to consider how this will be reconciled once it is paid into the company’s bank account (it needs to be a UK account).

HMRC will reserve the right to investigate claims and cross-reference them to RTI data.

 

Replies (222)

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By shosk
02nd Apr 2020 10:17

Any advice would be greatly appreciated.
We have a large range of employees at our leisure centre.
Salaried - this seems fairly simple, you can claim 80% of what the salary was on 28th Feb.
Contracted employees paid on a 4 and 5 week pay month - if an employee is contracted 24 hours per week but every month their pay differs due to covering shifts etc. Would we then pay the employee based on 24 hours but claim 80% based on the Feb payroll or last 12 months average. The payroll for April and what we are able to claim is completely separate. is that correct?

Thanks

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Replying to shosk:
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By sallyrichardson
02nd Apr 2020 11:46

As per HMRC

If the employee has been employed (or engaged by an employment business) for a full twelve months prior to the claim, you can claim for the higher of either:
-the same month’s earning from the previous year
-average monthly earnings from the 2019-20 tax year

Once you’ve worked out how much of an employee’s salary you can claim for, you must then work out the amount of Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions you are entitled to claim.

Also from HMRC

You must pay the employee all the grant you receive for their gross pay, no fees can be charged from the money that is granted. You can choose to top up the employee’s salary, but you do not have to.

So in other words, you need to pay them the higher of what they were paid same month last year, or the 12 month average. But you need to put through payroll the amount claimed for each employee - and you have to pay them all of the money you are claiming. We have taken this to mean that you cannot work out their pay on one method, then claim on another - payroll should exactly mirror your claim from the HMRC (gross pay, ER NI and pension payments) unless you are topping up their pay.
Hope this helps.

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Replying to sallyrichardson:
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By whiteways
02nd Apr 2020 11:59

"So in other words, you need to pay them the higher of what they were paid same month last year, or the 12 month average."

What if the employee was paid one annual payment in April?

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Replying to whiteways:
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By spuddle
03rd Apr 2020 12:08

I'm interested in this point for people who may only be paid in month 12, albeit that they may be directors, which is another matter.
As the payment & claim should be based on the higher of same month last year or 2019/20 average then presumably 1/12 of the amount can be claimed and paid each month for 2020/21?
If true it is still possible to include amounts in month 12, 2019/20?

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Replying to whiteways:
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By sallyrichardson
03rd Apr 2020 13:04

The scheme is designed to cover wages staff are expecting, when the employer cannot pay them. If they were paid 1 payment in April because they only work one month per year (which seems strange) then it would seem sensible to pay them 80% of this payment up to the threshold in this April's payroll, make a claim and then not pay them or claim again -as you would only normally pay them once a year.

If they work all year and you only pay them once as they are for example a director and it saves on payroll costs, it would seem reasonable to work out the average across the 12 months and pay them a monthly average 80% of this each month until the scheme is stopped. As I'm sure if you only pay them once a year, they draw down this money and live on it throughout the year?

As long as you have full workings of your claim, and you have acted reasonably without trying to reclaim too much money, I can't see you'll get in trouble.

This is just my opinion!

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By nglen1
02nd Apr 2020 16:21

Does anyone have the guidance on how this works for an employee in a Temp to Permanent situation.
Employee is being furloughed. Is on an Initial 3 month contract due to expire on 7th May but would have been made permanent as role will be required after lockdown ends.

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By nglen1
02nd Apr 2020 16:21

Does anyone have the guidance on how this works for an employee in a Temp to Permanent situation.
Employee is being furloughed. Is on an Initial 3 month contract due to expire on 7th May but would have been made permanent as role will be required after lockdown ends.

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By rgolstein
03rd Apr 2020 04:44

Currently company directors (primarily those that operate from a home office) are not eligible for any grants or compensation during the COVID-19 crisis! This can be crippling for small businesses.

The government states that directors are to use the CJRS scheme, but in most cases, they will not be eligible on a technicality without closing down their business.

Please sign and share, in support of small company directors, to enable them to fairly get some compensation during this crisis.

https://www.change.org/cjrs-for-directors

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By StevAustin88
03rd Apr 2020 13:31

Afternoon all,

I believe I am set up like many other small pseudo 1 man band Ltd companies: Essentially I am the Director and my wife supports me by doing the book keeping, answering the phone and all other back office support, etc. So, as advised by our accountant many years ago, we are PAYE at the max tax free amount + take dividend payments as profits allow.

My business is our only source of household income and we have 2 kids under 16 years old. It ceased trading immediately post lockdown.

My understanding is that we will only qualify for 80% of £719 once I furlough my wife. I as a Director cannot furlough myself as I will take over back office work even though it will be non revenue generating work.

We're being expected to survive on £575/mth until my business restarts, and like many, many other businesses it is likely to be a slow ramp up post removal of the lockdown to where we were before COVID. Not sure how the Governments' financial, "hand out" strategy is going to help businesses/people like us survive...

And before anybody suggests we've not been paying our taxes, we like most small businesses pay via Corporation tax and make a tiny saving on NICs contributions.

Stay safe and see you on the other side - what ever that will look like..

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Replying to StevAustin88:
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By Cathy Milligan
03rd Apr 2020 14:44

If you are not generating any trading income, you CAN furlough yourself.

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By freshapple
06th Apr 2020 13:19

Good Afternoon all,

Can anybody explain how the CJRS will work in practice? How are we supposed to run payroll?
Do we run payroll as we normally do by sending RTI report to HMRC but we do not pay employees and wait for the money to come from HMRC? The technical bits are not clear at all.

thank You
E

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Replying to freshapple:
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By Brian Gooch
06th Apr 2020 14:22

You run payroll as normal and pay the employees as normal. Then reclaim the (proportion of) the money from HMRC.

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By petefa
06th Apr 2020 17:05

The updated guidance seems to indicate that 'compulsory commission payments' are now included in the calculation of the amount the employer can claim for, and that it is just discretionary commission that is excluded.

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By SXGuy
06th Apr 2020 21:25

"In order to take advantage of the scheme employees should be paid 80% of their pay based on February 2020, tax year 2019/20 or the same month last year, whichever is the higher."

This is misleading. The above is on the basis that someone is paid a variable wage, such as variable hours. This does not apply to someone of a fixed salary.

Someone who perhaps received more salary Feb 19 but had a reduced salary for the proceeding 12 months would not be assessed based on Feb 19 pay. But I've had a number of clients employees argue it is the case. When it isn't.

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Replying to SXGuy:
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By Brian Gooch
07th Apr 2020 08:50

That is a good point. A fixed salary that has reduced since Feb 19 is still a fixed salary, so the claim should be based on Feb 2020.

In any case, as far as employees are concerned what they are paid depends on what is agreed with them. It may affect how much grant can be claimed, but it isn't determined by the grant unless the new variation to their employment terms explicitly says so.

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Replying to Brian Gooch:
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By SXGuy
07th Apr 2020 09:13

I agree. Its just without articles like this or the dreaded Martin Lewis explaining it correctly its causing arguments with employers and employees.

One example is a client of mine was paying staff up to 1500 pm Feb 19 but one of her contracts ended and as a result staff pay was reduced to just 500pm for the proceeding 12 months.
The employee is arguing thanx to Martin Lewis that their furlough pay should be based on Feb 19 as its higher. Which is clearly wrong. As the employee stands to gain around 700pm more than they have received for the last 12 months.

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Replying to SXGuy:
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By shosk
07th Apr 2020 09:26

Should be based on Feb 2020?

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Replying to shosk:
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By SXGuy
07th Apr 2020 11:33

Yes in this case it should be based on Feb 20 but employees are getting confused because of the unclear advice seperating fixed wage employees and variable wage employees

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Replying to SXGuy:
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By shosk
07th Apr 2020 11:18

tell me about it, we have salaried staff, contracted hour staff paid on a 4/5 week pay period, zero-hour staff, fixed term staff. very confusing

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By J accountant
06th Apr 2020 20:13

I use moneysoft for clients payroll . There helpline is closed due to the viras . All clients payrolls filed under my agent I’d and password .latest guidance says you have to be registered for paye online To claim the Coronavirus job retention payment and this can take 10 days. Do clients need to set up their own user I’d and password or can we file under the agent Id. As most are relying on me quickly claiming to enable them to pay their April payroll if this needs to be set up we need to act quickly

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Replying to J accountant:
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By JEJ
19th Apr 2020 11:57

As long as your clients are registered under your agent’s ID and you file for them on that basis, not a file only basis, as their agent you should be able to make the claim for them.

Government advice:

Applying through an agent
If you have an agent that has authorisation to act for you on PAYE matters online, they can make a claim for CJRS on your behalf.
If an agent is making the claim for you, tell them which bank account you want the funds to be paid into.

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Helen Froggett Thomson
By Helen Froggett-Thomson
07th Apr 2020 05:42

Hi, lovely feature, really thorough. Just one point though -wanted to clarify my understanding of one of the key points for furloughing payments relating to commission for sales staff.

'Past Overtime, Fees, Commission, Bonuses and non-cash payments

You can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.'
So my interpretation of this is that some commission payments CAN be included. But not discretionary bonuses, tips, discretionary bonuses or non cash payments. This is the source of my quote https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus...

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Replying to Helen Froggett-Thomson:
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By petefa
06th Apr 2020 21:11

Hi Helen

Yes, I think the guidance for employees is clearer on this point. It says:

'The grant paid to your employer will be calculated based on your regular, contractual pay, such as wages, compulsory commission and past overtime. The calculation will not include discretionary commission (including tips) payments or bonuses, non-cash payments or benefits in kind.'

https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronav...

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By 2556950
06th Apr 2020 22:52

Can anyone shed any light on if furlough payments should be treated as qualifying earnings for workplace pension purposes? I have contacted several sources trying to find the answer to this but can't find any definitive guidance on this.

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Replying to 2556950:
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By Brian Gooch
07th Apr 2020 08:31

Amounts you continue to pay employees whilst they are on furlough are still qualifying earnings, because the job retention grant for furlough employees also covers the employer's minimum required pension contribution.

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By whiteways
07th Apr 2020 11:14

I currently have an agency worker with an owner-managed Company who needs to furlough himself, so he cannot do gainful work for his Company during the period of furlough. He can do some work self employed, but the agency have refused to accept this, saying he must be paid through a Company. Catch 22.

The only way out that I can think of would be to form another Company and temporarily trade through that.

Any thoughts on this?

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Replying to whiteways:
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By SXGuy
07th Apr 2020 11:36

The work he wishes to do self employed im guessing would be the same work he would do via his company? so he isn't technically being furloughed then is he? all hes doing is avoiding working for the company, smells a bit fishy to me.

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Replying to SXGuy:
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By whiteways
07th Apr 2020 12:37

SXGuy wrote:

The work he wishes to do self employed im guessing would be the same work he would do via his company? so he isn't technically being furloughed then is he? all hes doing is avoiding working for the company, smells a bit fishy to me.

I don't know that, but I don't see anything in the published rules that would prevent him working on a self self employed basis for those who were formerly clients of the company, since this does not "generate commercial revenue or provides services to or on behalf of their company."

Here's the full quote.

"Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.

"This also applies to salaried individuals who are directors of their own personal service company (PSC)."

However, my question was to do with his forming a separate limited company.

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Replying to whiteways:
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By petefa
07th Apr 2020 13:15

So, you're happy with the idea of diverting income through another entity and then claiming money from the government on the basis that the original entity now has no income. Hmmm.

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Replying to petefa:
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By whiteways
08th Apr 2020 09:17

I'm really not sure of the reason for this snarky reply. I've quoted the relevant portions of Kate's OP and HMRC's website which are quite clear. If you want an argument, I suggest you go argue with them.

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Replying to whiteways:
Kitten
By Hazel Accounts
08th Apr 2020 11:35

Setting up another Company to work through and furloughing the director in the first one isn't allowed - the employee guidance states: "Whilst furloughed your employer cannot ask you to do work for another linked or associated company."

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Replying to Hazel Accounts:
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By whiteways
08th Apr 2020 11:45

Thanks, that was the answer I was looking for. However, Kate's OP does say that furloughed workers can do self employed work. Do you know of any restrictions on that?

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Replying to Hazel Accounts:
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By whiteways
08th Apr 2020 11:45

Thanks, that was the answer I was looking for. However, Kate's OP does say that furloughed workers can do self employed work. Do you know of any restrictions on that?

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Replying to whiteways:
Kitten
By Hazel Accounts
08th Apr 2020 12:57

No, I don't know. I think HMRC will make some checks and that your client should act within the spirit of the scheme - so presumably furloughs as LTD business can't continue (the scheme is for situations "If you cannot maintain your current workforce because your operations have been severely affected by coronavirusis Covid-19") but does some self-employed activity that is different from the Company's business temporarily. Don't think he can go off and do the same sort of work as the company as that would imply the business wasn't so severly affected by coronavirus that it had to shut.

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By Brewereastbrae20
07th Apr 2020 12:08

Not sure on this
Do you make monthly claims or for all of the period knowing you will not recommence business before 30/06/2020
Thanks

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Replying to Brewereastbrae20:
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By Brian Gooch
07th Apr 2020 14:24

You can claim for minimum periods of 3 weeks at a time. You could wait and claim the whole period as one claim on30 June, but you can't claim it in advance because all the conditions must have been met before you can make a claim.

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By ianthetaxman
07th Apr 2020 19:11

An earlier version of the HMRC guidance piece did include certain tasks that it saw as being non-statutory, but these have now been removed and instead there is next to no specific guidance on what is or is not statutory duties.

Take a look at s.171 - 177 of CA2006 if you want the full run down of what are the statutory duties we are all banging on about. Problem is, most of this is what you might call 'common sense' and doesn't include a tick list of tasks included - that would be really handy right now...

Suppose a director, sat at home, picks up the phone and takes a call from an unknown number. Maybe it's HMRC, or Companies House, or a new customer? The first two would probably be fine as statutory duties go, but what about the third one? At what point do they make their excuses and refuse to carry on the conversation, maybe they just hang up, or something in between both? Far fetched as this may seem, I still find it hard to see how a director of a one man band company can comfortably furlough themselves and still undertake work that they did the week before without causing themselves a headache?

And how will it be policed????

Who knows....

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Replying to ianthetaxman:
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By Hazel Accounts
08th Apr 2020 11:49

S172 says a Director has a duty to promote the success of the company and includes wording:

"(1)A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—
(a)the likely consequences of any decision in the long term,
(b)the interests of the company's employees,
(c)the need to foster the company's business relationships with suppliers, customers and others
(d)............."

I would think this means he/she can run payroll, talk to customers/suppliers, chase debtors, and undertake other (NON FEE EARNING) admin tasks? But that's just my opinion - and I think it's equitable and within the spirit of the help as the Chancellor doesn't want businesses to fail. (He also doesn't want to pay out to those that can still earn money and I agree it's a problem when they can earn a bit of money but less...)

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By Brewereastbrae20
07th Apr 2020 19:40

Not sure if my earlier question has been received
Not expecting business to resume before 30/06/20
Do we have to apply monthly or just the one submission for the whole period?

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Replying to Brewereastbrae20:
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By SXGuy
07th Apr 2020 20:05

Every 3 weeks for furlough pay previous period or all at once at the end of the 3 months.

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Replying to SXGuy:
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By Brian Gooch
08th Apr 2020 08:09

Or indeed any period, subject to a minimum of 3 weeks between claims.

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By Philip Nickson
08th Apr 2020 10:03

Kate Upcraft touches on the fundamental issue concerning "furlough compensation": Can agents submit claims on behalf of clients ? If not there is going to be mayhem and huge delays.

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By Mr J Andrews
08th Apr 2020 10:04

What about our local Bowls Club - now completely strapped for cash with no income from fees , bar takings and functions , and having had to furlough Dick the groundsman. Dick is prepared to volunteer and keep the Green in some order ; otherwise weeds , fungi and general growth will ruin the playing area and add to the crippling debts the club anticipate when this crisis is over.
Dick is certainly not generating any monies for the Club. But is this voluntary gesture deemed a service - another forbidden area of furloughing ? Surely it wasn't Chancellor Sunak's intention that employers should face this dilemma of their employees being paid NOT to work , only to face future problems...........
Sadly Employment Law doesn't cover the vagaries of furloughing . But have any colleagues encountered this scenario and come up with the answer ?

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Replying to Mr J Andrews:
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By Brian Gooch
08th Apr 2020 11:32

I think the current guidance from HMRC says that furloughed employees shouldn't provide any services to the employer. But if any members wanted to put together a rota to keep the weeds at bay that wouldn't be a problem, and nor would Dick volunteering to do the same for his local lawn tennis club who have also furloughed their groundsman, for example.

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By julieclare
08th Apr 2020 10:15

My question is about running payroll. I have a number of clients in the retail trade and their shops have closed and all staff are furloughed. They are not in a position to pay staff as they have no income coming in and are already maxed out with borrowings. So staff have to wait till the end of this month (hopefully) to get 80% of their wages. So no payroll run has been done since they got their last wage. No net pay so nothing to report. The plan is once the 80% funding comes thro' the client will then catch up on the payroll processing 80% of gross wages, issue payslips and pay staff. Is this ok?

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Replying to julieclare:
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By SXGuy
08th Apr 2020 10:43

Not quite. If you expect to furlough pay them then run the payroll for 80% of their wages. You don't wait. You do it now.

Also the 80% furlough add to that the ni and pension.

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By ayjay3
08th Apr 2020 10:24

How does claiming the employer’s NI contributions work if the employer benefits from ability not to pay the first £4,000 of them under the Employment Allowance Scheme? Is there a clash?

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Replying to ayjay3:
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By SXGuy
08th Apr 2020 10:45

If there's no employer ni to pay then don't add it to the calculation? Pretty straight forward.

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By Jay_K
08th Apr 2020 10:19

Hello,
A question and advice if possible please?

I was recently made redundant. Last working day was 10th February (P45 date) but I was paid a month PILON.
I was paid at the end of February with the payroll processing date as of the 29th February 2019.

Due to the current crisis I have been unable to find alternative employment. I have gone back to my old employer and asked if they would be prepared to re-employ me and put me on Furlough.

I am still awaiting a response from them but I just wondered given the dates mentioned above should they be willing to consider this, would I qualify?

My understanding is that I should as I was on the payroll at the end of February but I am concerned as my actual official leaving date was the 10th February.
Any help or advice would be much appreciated for when I do go back to discuss this with my old employer.

Thanks
Jay

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By [email protected]
08th Apr 2020 10:52

Online tax account? I don't think I have one never mind the clients. And if the clients are all on furlough who is going to open the post to get the codes so payroll clients can be set up.
It looks like the 'spinning' is already starting to restrict the scheme. Someone has briefed the press that the CJRS is going to cost five times the initial estimate according to an item on the radio this morning.

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