In light of the government guidelines, all our offices are now closed and our teams are all working remotely, but are on hand to help you through these challenging times.

For assistance please get in touch with your main contact directly or email our covid19help@armstrongwatson.co.uk. Alternatively if you wish to talk to us, please call 0808 144 5575.

Hands protecting Employees

Job Retention Scheme Update: Extension to October & Further Clarity

Yesterday (12th May 2020) The Chancellor, Rishi Sunak announced an extension period to the Job Retention Scheme up to the 31st October. Despite this being welcome news for many it also comes with caveats that full detail will be announced at the end of May; this will include scheme flexibility and the proposed part-time returning of workers currently on furlough leave. The Chancellor also made it clear that businesses will be required to share the cost burden of the extension of the scheme and so for many this news is met with a degree of concern until we know the full facts.

In summary from what we now understand:

  • Coronavirus Job Retention Scheme will continue until end of October
  • Furloughed workers across the UK will continue to receive 80% of their current salary, up to £2,500
  • The scheme will continue in its current form until the end of July and the changes to allow more flexibility will come in from the start of August.
  • Further detail announce by the end of May 2020

The Chancellor’s decision to extend the scheme, which will continue to apply across all regions and sectors in the UK economy, comes after the government outlined its plan for the next phase of its response to the coronavirus outbreak.

Our head of payroll Karen Thomson will provide an update once detail is known but she will be asking questions such as:

  • If allowing flexibility i.e. part time working, will there be minimum hours?
  • If permitted to work, then presumably the furlough legislation will no longer be applied and instead new rules for the JRS?
  • What contribution will employers need to make and will there be conditions to be satisfied first?

Further Clarity Under the Existing Rules:

Annual payrolls (normally director only) where their full payment submission (RTI payroll return) was submitted on 19th March or before can make a claim for 1/12th of what they paid themselves in the 19/20 tax year.  It is important to note where an annual payroll, only one payment can be claimed as there is no monthly/weekly payroll being operated.

In addition, questions have been raised around how the grant impacts the role of the Senior Accounting Officer (SAO).  HMRC has confirmed it considers the CJRS grants to come within the SAO regime.  The grants will be part of a company’s receipts for CT purposes and the employee wages and NICs will be a business expense in calculating taxable profit, so fall within paragraph 14(3)(a) schedule 46.  Therefore, a company’s SAO will need to ensure appropriate accounting arrangements for CJRS grants and the wages they cover.

HMRC Updates to Existing Scheme:

In response to feedback from customers using the service a 'save and return' option has been added. This means that you can now return to a partially completed claim, rather than having to do it all in one go.

Helpful hints & tips helping you to avoid common mistakes

When you make a claim through the Coronavirus Job Retention Scheme, you will receive the funds within six working days after you apply, provided your claim matches records that we hold for your PAYE scheme.

These steps should help keep the process as simple as possible:

  • Check your employees are eligible, by looking at the guidance on GOV‌.UK
  • Check your calculations each time you submit a claim, in case any details have changed
  • Only submit one claim per pay period – you can’t submit another claim for overlapping periods; this means that in each claim you should include all furloughed employees paid during that period
  • If you have missing National Insurance numbers for employees, do try and find them so it doesn’t delay your claim; if an employee doesn’t have a National Insurance number yet, you should contact HMRC in order to complete your claim; go to GOV‌.UK and search for 'get help with the Coronavirus Job Retention Scheme' to find out how to make contact
  • Double check all of the information in the claim before you submit it, including your bank details.

HMRC also stressed ‘please don’t amend your next claim to reflect any errors that you may have made in a previous one, as this could delay payment’. If HMRC spot an error then, where possible, they will contact you or your agent to correct the claim.

After you make a claim – reporting employees' wages to HMRC

If you’ve claimed a grant through the Coronavirus Job Retention Scheme, you should check if you need to report payments on the PAYE Real Time Information system. This will depend on whether you are using the grant to pay wages or to reimburse wages that you’ve already paid. To find guidance on this, go to GOV‌.UK and search for 'report wages Coronavirus Job Retention Scheme'.

If you have any questions on the above updates or you'd like more information or advice, please get in touch with Karen Thomson at Covid19help@armstrongwatson.co.uk or call us on 0808 144 5575.

Contact Karen

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