Price Bailey is aware that this continues to be an extremely difficult time for everyone across the country. Businesses have had to adapt their working practices to enable their business and their employees to continue working as normal as possible. Price Bailey has also had to adapt to ensure we can continue to provide quality advice and assurance to our clients – for more information on our response to COVID-19, you can find details of what we’re doing here.
Coronavirus Job Retention Scheme (CJRS)
Since the Job Retention Scheme (CJRS) opened on Monday 20 April, the team at Price Bailey have been supporting clients to prepare for and claim through the HMRC portal. Here we share some of the experiences that our payroll and accounts team have had so far, and our advice to businesses who are either in the process of preparing to make a claim or considering it. This article reflects our experience of the claims process for CJRS and SSP, for the latest information on CJRS, please read our article here.
Preparing the information in order to submit a claim through the portal is the most time-consuming step.
- The payroll processing itself and undertaking calculations for furloughed employees who are on a variety of different employment contracts, and furloughed employees with any form of salary top-up (i.e. where employers are making up some or all of the 20%).
- In addition, the 80% to claim back for each furlough employee will need to be calculated. This will be a time-consuming process if the employee has any of the complexities mentioned below and, for the first claims, where you need to perform separate calculations for furloughed employees in March and April, more on this below.
The information HMRC requires can be found in our article here.
The guidance on the scheme has been an evolving process, for instance, the employer guidance on the CJRS is currently on its seventh version and guidance for calculating the 80% claim is on its third, with the final guidance on the scheme only being released on Friday 17 April. No preliminary access to the claims portal was granted to anyone, including agents or advisors; therefore, this last week has been a steep learning curve for all involved.
Preparing your claim for April payroll, being the first month of the scheme, will take the longest. April claims are likely to be made up of two elements 1) furloughs in March and 2) furloughs in April, for which you have to do two separate calculations as they fall in different tax years, and then combine into one claim to input onto the portal. Our expectation is that for May and June, it will become easier.
The more complex the circumstances of the employees in furlough, the longer the process is taking; conditions of employment, e.g. furloughing where there are salary sacrifice implications, elements of variable pay or pension schemes with alternative arrangements, will all need to be included in the claim calculations. Both you and your accountant need to be clear and confident that the claim is correct prior to submission.
HMRC has provided a calculator to support businesses, and whilst this only deals with very basic calculations, it has now been updated to cope with some variable pay components. There are however many scenarios for the calculation that the HMRC calculator cannot handle, and our advice to businesses would be to retain your workings in case HMRC check your calculations. Price Bailey have created their own calculator for use with clients’ individual circumstances; it is now on its 14th version to help us deal with more complex furlough calculations.
National Insurance – Employers’ Allowance
Businesses that incur an employers’ National Insurance (NIC) liability of less than a £100,000 in the previous tax year, as per their payroll, can qualify for an Employment Allowance of £4,000 for the following tax year. The allowance is offset against employers’ NIC, meaning they only pay NIC once they’ve exhausted this allowance. Ordinarily, employers would use the allowance from the April payroll. However, in accordance with the rules, it can be claimed at any time during the tax year.
If a business has already submitted an April claim through the CJRS portal for employers NIC and has also claimed the allowance in the April payroll, this is effectively a double benefit and is not we believe in the spirit of the law, and this is not the time to push boundaries. It is an easy check that HMRC can make, and we could see claims questioned about employers NI at a later date. If this has happened, we suggest that businesses, where applicable, amend this on their next claim rather than try contacting HMRC to amend a claim already submitted.
There is also a thought process that, as a business doesn’t have to claim their Employment Allowance at the beginning of the tax year, the business could claim through the CJRS portal for employers’ NIC now and then claim for the Employment Allowance once the CJRS scheme ends. While HMRC has not explicitly stated that this could not be done, we would not expect that this would be accepted and, in regards to any clients Price Bailey advise, we will not be issuing claims on this basis.
Claiming on the portal
Our experience with the portal thus far is that it is relatively straightforward, provided you are appropriately prepared. We are not currently aware that HMRC is undertaking detailed audits of each claim; however, the portal is identifying any discrepancies between the number of employees included on a claim and the number of employees on the relevant RTI report.
- Being well-prepared is vital to ensure the claim can be completed quickly. Although the portal will time out after 15 minutes of inactivity, it does allow you to sign out when you’re part-way through completing a submission, and then come back to it later, without losing what you’ve already entered. However, it currently doesn’t carry forward information from a prior submitted claim (e.g. bank details), so you will need to re-enter them each time.
- If the details provided are incorrect for one employee, there is the risk that the entire claim will need to be paid back, rather than just the claim for that particular employee.
- Typically most businesses will submit one claim a month around the time that their payroll is processed. However, there is nothing to stop you from inputting a claim after two months, or indeed towards the end of the scheme, currently the end of October. However, it could make the actual claim computation more difficult and time-consuming because you can only submit one claim figure for gross pay, ER NI and pension per employee, so please allow plenty of preparation time.
- Please also bear in mind that you can only claim for costs incurred.
- At the point of submitting a claim through the portal, HMRC will not check to ensure that the business has correctly followed furlough procedures. However, we understand that claims will be audited retrospectively; therefore, it is vital that you seek legal advice if you are unsure whether you have followed the required procedures.
- We have identified that for many of our clients who provided an RTI submission after the 19 March 2020, their claim is not being accepted by the portal, despite previous RTIs in the system. This can be resolved; however, you have to speak to HMRC directly and, given the volume of calls they are receiving, HMRC are advising it can take up to 10 working days for a call-back. The claim will be resolved, and we also expect this is a problem specific to March payroll, but it is worth managing expectations with employees now if you believe this may apply to you.
- There are a number of other queries that may require you to speak to HMRC prior to being able to submit your claim. In our experience so far, about 25% of claims require a phone call with HMRC prior to submission. The majority of these calls are thankfully dealt with straight away, but there is a small percentage of calls that require further investigation or specialist advice. Therefore, it may take up to 10 days to receive a response, and in some cases, the query is referred to another department or area of specialism which can take up to a further ten days before the query is resolved.
The portal only allows submissions for claims that are within 14 days from now. So for example periods ended 31 May, even if we’ve already run the payroll, the claim can only go in after 17 May.
HMRC has said claims can take up to six days; however, it would appear that HMRC is taking longer to process claims, possibly because they are now finding time to undertake more thorough checks.
As an example, on one of our first claims for a client with a monthly payroll and a four-weekly payroll, we filed two claims but with slightly different claim period dates, and the client received the money for both claims within three working days.
HMRC has told us on the phone that we should not chase them before ten working days have passed.
Coronavirus Statutory Sick Pay Rebate Scheme (CSSP)
For small and medium-sized businesses with less than 250 employees, two weeks Statutory Sick Pay (SSP) is able to be reclaimed per eligible employee absent due to COVID-19 (this includes both Coronavirus sickness and isolation absence) on or after 13 March 2020. Employees will not need to present a GP fit note but can be supplied an isolation note from NHS111 online to satisfy their employer.
The CSSP opened on 26 May for employers to make a claim. The process broadly follows the same format as the Coronavirus Job Retention Scheme (CJRS) claims.
The information employers will need in order to make a claim is:
- Claim period
- Number of employees
- Amount claimed.
The system will pick up if the total claim is too high (based on: number of employees x period (weeks) x SSP rate), but a lower value is accepted.
In contrast with the CJRS, you can make claims that overlap and employers are not required to provide the individual employee’s names or NI numbers.
Please note, claims can only be made for periods that have already passed.
Looking for help?
The Price Bailey team is here and continue to work remotely to support our clients and non-clients to navigate these uncertain times. For those looking to access the Job Retention Scheme, here is how we can help:
For payroll clients
We can set them up on the portal and submit grant claims, subject to the client approving the claim before submission. Please speak to your PB contact for more information.
For non-payroll clients
We cannot do this due to GDPR restrictions. However, we can support you in preparing the claim for you to file yourself and can offer advice on the Job Retention Scheme and other government support packages.
This blog was written by Stuart Curtis, a Partner at Price Bailey. For more information on the Coronavirus Job Retention Scheme, please contact us on the form below.
We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.