Making a claim under the Coronavirus Job Retention Scheme

April 14, 2020

Have you furloughed?

Employers should discuss with their staff and make any changes to the employment contract by agreement.

To be eligible for the government grant (CJRS) employers must confirm in writing to their employee confirming that they have been furloughed.  A record of this communication must be kept for five years.

Employees who you do place on furlough cannot undertake work for you.

Pay My Nanny has a template furlough agreement available upon request.

 

Making a claim

It has been announced by HMRC that employers will be able to access the claim portal in the week commencing 20th April 2020 via an Employers PAYE Online login.  Agents (e.g. Pay My Nanny) will be able to make a claim on behalf of clients providing they hold HMRC agent authorisation to act on PAYE matters, for the majority of our clients this is in place, but there is a handful that we have been unable to gain this authority if this is the case we will contact you separately about this.

Access to the claim portal also becomes live during the peak monthly payroll processing period between the 20th to 30th April and as such many payroll service providers may not have the staff resources to manage the volume of claims during this time, this will ease off from 1st May.  Additional staff resources are needed to manage any claim service and to cover the cost an additional charge will be incurred and will need to be paid prior to the claim being made.  We are still receiving technical data and feedback from our connections to gauge what the claim process might form so have not as yet fixed a fee for this service.

Therefore if you need to make a claim soonest then your best option is to manage the claim process yourself.  The first step is to make sure you have an Employer PAYE Online portal now, see below section on “Creating an Employer PAYE Online account”, setting up an account can take 10 days in normal circumstances.

When making a claim employer/agent will need the following information: –

  • Employer PAYE reference number
  • National Insurance Numbers for the employees to furlough
  • Name of the employee to furlough
  • Payroll/works number for the employee to furlough
  • The claim period (start and end date)
  • Amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
  • Bank account number and sort code
  • Contact name
  • Contact phone number

HMRC will retain the right to retrospectively audit all aspects of a claim.

You should make your claim using the amounts in your payroll – either shortly before or during running payroll. Claims can be backdated until the 1st March where employees have already been furloughed.

If appropriate, worker’s wages should be reduced to 80% of their salary within your payroll before they are paid. This adjustment will not be made by HMRC.

Minimum furlough periods

Any employees you place on furlough must be furloughed for a minimum period of 3 consecutive weeks.  When they return to work, they must be taken off furlough. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of 3 consecutive weeks.

After you’ve claimed

HMRC will check your claim, and if you’re eligible, pay it to you by BACS to a UK bank account.

You must pay the employee all the grant you receive for their gross pay in the form of money.

Furloughed staff must receive no less than 80% of their reference pay (up to the monthly cap of £2500).

Employers cannot enter into any transaction with the worker which reduces the wages below this amount.  This includes any administration charge, fees or other costs in connection with the employment.

When the government ends the scheme

When the government ends the scheme, you must make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).

HMRC will process all claims made before the scheme ends.

 

Creating an “Employers PAYE Online” portal

It can be confusing which link to use to create your own Employer PAYE Online portal flooring the government’s advice and many may end up creating a brand new PAYE scheme altogether as a result.  Therefore here is the link to the starting point to create your online access for your existing PAYE scheme, following the steps:-
https://www.access.service.gov.uk/registration/email

If you already have an employer online account you can log in here and make sure you have PAYE for employers added as a service: https://www.access.service.gov.uk/login/signin/creds

Enrol as a new user by selecting ‘PAYE for Employers’ under ‘Organisation’ and following the steps.  You will need your PAYE employers references, these will have been provided to you when we set up your PAYE scheme with HMRC or can be found on your monthly payroll reports.

Activating your PAYE Online

  1. You’ll get a letter in the post within 10 days of enrolling – this will include your activation code.
  2. Log in to HMRC Online Services again within 28 days of getting your code.
  3. Activate the service by entering your code.