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.
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:
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.
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:
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.
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'.