Employment & Payroll Update (23rd March 2020)
Main Government guidance can be found at: https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses
Rules for Job Retention scheme – what we do know
- The Government will pay up to 80% of furloughed workers (see definition below), with a cap of £2,500.
- New online HMRC portal will be set up whereby a business will need to provide salary details for those impacted and were on the PAYE scheme as at 28 February 2020. Where Armstrong Watson processes your payroll, we are currently investigating how best to provide clients with the information required. It is also hoped your payroll administrator will be able to supply the information to HMRC, via this new portal on your behalf. More on this as soon as HMRC releases further information
- Gig workers- the 80% is expected to be based on their wages received in the month of February and backdated to 1 March; we await confirmation of this process. If Armstrong Watson processes your payroll and you have this category of worker e.g. zero hours we can supply this information
- It is expected that employers will get in touch with any employees already laid off to advise they are now a furlough worker, but the employee can obviously get in touch with their previous employer to see if they intend to operate this scheme?
- Written communication changing the status of a worker will be required
HMRC describes the furloughed worker as (directly from HMRC)
- If your employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of your wage, (https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses#support-for-businesses-through-the-coronavirus-job-retention-scheme) to avoid redundancies.
- If your employer intends to access the Coronavirus Job Retention Scheme, they will discuss with you becoming classified as a furloughed worker. This would mean that you are kept on your employer’s payroll, rather than being laid off.
- To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.
- You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.
- If your salary is reduced as a result of these changes, you may be eligible for support through the welfare system (https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-guidance-for-employees#claiming-benefits), including Universal Credit.
- We intend for the Coronavirus Job Retention Scheme to run for at least 3 months from 1 March 2020, but will extend if necessary.
Statutory Sick Pay update
Employers who are eligible include:
- A refund of the full SSP paid that will cover up to 2 weeks’ SSP per eligible employee who has been off work because of COVID-19. It should be noted, I understand a Period of Incapacity to Work (PIW) is still required i.e. must be off sick for 4 days or more (it is expected this rule will be met due to the 7 plus days isolation). Where Armstrong Watson processes your payroll, please be advised our systems have already been updated to allow us to process SSP from day 1
- Employers with fewer than 250 employees will be eligible - the size of an employer will be determined by the number of people they employed as of 28 February 2020 but all payments can be backdated to 13 March 2020. Where Armstrong Watson processes your payroll, should retrospective SSP be required, we will work out the payment for you.
- Employers will be able to reclaim expenditure for any employee who has claimed SSP (according to the new eligibility criteria) as a result of COVID-19
- Employers should maintain records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. If evidence is required by an employer, those with symptoms of coronavirus can get an isolation note from NHS 111 online and those who live with someone that has symptoms can get a note from the NHS website. Where Armstrong Watson processes your payroll, whilst we do not record the days absent as this will remain the responsibility of the employer, we will be recording the amount of SSP paid
- Eligible period for the scheme will commence the day after the regulations on the extension of SSP to those staying at home comes into force
- The government will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible. If Armstrong Watson processes your payroll, it is hoped the Government reclaim scheme will permit agents to do this on client’s behalf
Carrying Leave Over
Workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry it over into the next 2 leave years. To find out more click here
Time to Pay
If you find you are struggling to pay your PAYE bill then all businesses and self-employed people who are in financial distress, and with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.
These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.
To be eligible your business needs to:
- pay tax to the UK government
- have outstanding tax liabilities
If you take advantage of the TTP arrangements and Armstrong Watson process your payroll and, as a result make the Bacs payment on your behalf to HMRC, please ensure you advise your administrator to prevent a payment going to HMRC.
For further information on the Time To Pay arrangements click here: https://www.businesssupport.gov.uk/time-to-pay/
How to access the scheme:
If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline on 0800 0159 559 or if you’re worried about a future payment, please call HMRC nearer the time.
Self-employed and payments
For the self-employed an automatic deferral of payments that were originally due 31 July 2020 will be deferred to 31 January 2021 – no application is needed.
Please visit the new Business Support Hub for advice or contact a member of our team https://www.businesssupport.gov.uk/
Karen Thomson who heads up the payroll service line, is in regular contact with HMRC via the various forums she is a member of and will advise on any new information, as it is announced. If you do have any questions please do not hesitate to contact her on 0808 144 5575
Download Furlough Template
Thanks to Stephen Elliot of the Endeavour Partnership for helping us put together this Furlough Template which you can download here.