A question about furloughing

What my accountants sent me.

Dear Ben,

FURLOUGH/JOB RETENTION SCHEME

The Furlough/Job Retention Scheme will be going live next Monday 20th April 2020 and we wanted to ensure that you as a valued client of Sargeant Partnership are fully up to date on all the latest information regarding the scheme and are fully prepared and ready to be able to access and use the scheme.

IMPORTANT UPDATE TO SCHEME

The chancellor announced an important update to the scheme this week surrounding employee eligibility.  This related to the date in which employees needed to be employed on to qualify for the scheme, which was previously set at 29th February 2020, however this has now changed to 19th March 2020 as follows:-

• you can claim for employees that were employed as of 19 March 2020 and were on your PAYE payroll on or before that date; this means that you will have made an RTI submission notifying us of payment of that employee on or before 19 March 2020.
• employees that were employed as of 28 February 2020 and on payroll (i.e. notified to us on an RTI submission on or before 28 February) and were made redundant or stopped working for you after that, and prior to 19 March 2020, can also qualify for the scheme if you re-employ them and put them on furlough.

For those employers that run monthly payrolls and make their RTI submissions at the end of the month any employees who started employment between 1st March 2020 and 19th March 2020 would not have been included on an RTI submission prior to 19th March 2020.

For these employees we would suggest that you amend and re-submit your February RTI submission to include these employees noting their start date so that they are included and therefore eligible for the scheme even though no payment had been made yet.

More information on this can be found on GOV.UK

HOW TO CLAIM

As mentioned above the scheme will be going live on Monday 20th April 2020.  Please don’t try to access it before then as you will not be able to.

It is a scheme that can only be accessed online through GOV.UK and full support on how to use the scheme including how to calculate the claim amount will be available on line through GOV.UK

Claims will be paid within 6 working days; you should not contact HMRC unless it is absolutely necessary – any queries should be directed to us as your agent or the HMRC webchat service

HMRC cannot answer any queries from employees – they will need to raise these with you, as their employer, directly.

WHAT INFORMATION WILL YOU NEED TO CLAIM?

We have been talking to all our clients explaining what information and systems they will need in place to be ready to make a claim and below is a complete summary of what you will need in place: -

• a Government Gateway (GG) ID and password – if you don’t already have a GG account, you can apply for one online, or by going to GOV.UK and searching for 'HMRC services: sign in or register'
• be enrolled for PAYE online – if you aren’t registered yet, you can do so now, or by going to GOV.UK and searching for 'PAYE Online for employers'
• the following information for each furloughed employee you will be claiming for:

1. Name
2. National Insurance number
3. Claim period and claim amount
4. PAYE/employee number (optional)

• if you have fewer than 100 furloughed staff – you will need to input information directly into the system for each employee
• if you have 100 or more furloughed staff – you will need to upload a file with information for each employee; we will accept the following file types: .xls .xlsx .csv .ods.

ASSISTANCE WITH MAKING A CLAIM

If we are authorized to act for you in respect of PAYE matters, we will be able to deal with the claims on your behalf.  This will be the case for clients where we provide a Payroll service.

For clients that we do not provide a Payroll service for or who we don’t have authority for, we can still assist with your claims and provide advice as to how to use the service, however we won’t be able to talk with HMRC or login on your behalf.

We have recently requested authorisation codes for all our payroll clients that we don’t have authority set up for and therefore if you do receive a code please could you forward it on to either your Client Manager or our Payroll Manager Jane Croxton.

If you will be processing the claims yourself as advised above you will need a PAYE HMRC login account that can take up to 10 days to be set up, therefore we would suggest that you ensure this is in place if required so that it does not cause any further delays.  If you need any help with this please let either your client Manager or our Payroll Manager Jane Croxton know.

If we are dealing with the claim for you, in order to ensure funds are paid as quickly as possible to you, then you will need to tell us which UK bank account you want the grant to be paid into.

Please also ensure you retain all records and information in respect of your claims.

VAT PAYMENT DEFERMENT SCHEME

As previously advised if you are a UK VAT registered business and have a VAT payment due between 20 March 2020 and 30 June 2020, you have the option to:

• defer the payment until a later date
• pay the VAT due as normal

You will still need to submit VAT Returns on time, however no interest or Penalties will be charged on any deferred payments of VAT following the chancellor’s announcement.

If you choose to defer the payment you will have until 31 March 2021 to make the payment.

You do not need to advise HMRC as this is an automatic deferment.

Please note though that for anyone who pays by Direct Debit and wishes to defer their VAT payment then they must cancel their Direct Debit with their Bank otherwise the payment will be taken as normal.  This can easily be done online through your online banking facility

VAT refunds will be processed as normal.

All VAT payments due following this deferment period should be paid as normal.

FURTHER ASSISTANCE FOR ANYONE FACING FINACIAL DIFFICULTY

Please note that for anyone experiencing financial difficulties more help is also available from HMRC’s Time to Pay service.  This service allows entities to discuss their difficulties with HMRC and come up with a plan to assist you during this challenging time.

Finally, we just want to reiterate that we understand that these are difficult and challenging times for all our clients and that you will be relying on us to provide advice and support you.

We therefore would urge you to please get in contact with us should you have any concerns or challenges facing you as we will be happy to assist and help you through this period.

Chizz said:

Swisdom said:

Chizz said:

Swisdom said:

My understanding up until this point is the I, as the employer, will pay any furloughed staff the 80% of their salary and then claim it back from HMRC however a friend's daughter was told yesterday she will get paid by HMRC and her boss cannot guarantee when this will be. (HMRC apparently "aim" to pay within 6 working days)

Obviously 2 very different scenarios and with the system on HMRC not being set up until Monday 20th April...and highly likely to crash on day one...I'm wondering if this is going to be a massive clusterfuck and people will get paid late etc etc

Anyone got any insight on this as much of the wording I have found online is so fucking woolly and non--comittal however I found something on the CIPD website yesterday that implied HMRC will be paying the individuals however my accountant is of the opinion I will pay it and reclaim.

Poxy virus!

The employer pays the staff on the normal payroll.  HMRC then pays 80% (up to the ceiling level) to the employer.  

(You can choose to pay the staff anything between 80% and 100% of their normal salary.  You can defer other payments such as pension contributions.  You have to have seek and get the agreement of the staff). 

Thanks.  I'm happier this way as I know my guys will get paid on time and that is my priority.

I'll let my mate's daughter know her boss has the wrong end of the stick (or is maybe just trying it on)

The last point (that the member of staff has to agree to being furloughed) is often missed.

bobmunro said:

Chizz said:

Swisdom said:

Chizz said:

Swisdom said:

My understanding up until this point is the I, as the employer, will pay any furloughed staff the 80% of their salary and then claim it back from HMRC however a friend's daughter was told yesterday she will get paid by HMRC and her boss cannot guarantee when this will be. (HMRC apparently "aim" to pay within 6 working days)

Obviously 2 very different scenarios and with the system on HMRC not being set up until Monday 20th April...and highly likely to crash on day one...I'm wondering if this is going to be a massive clusterfuck and people will get paid late etc etc

Anyone got any insight on this as much of the wording I have found online is so fucking woolly and non--comittal however I found something on the CIPD website yesterday that implied HMRC will be paying the individuals however my accountant is of the opinion I will pay it and reclaim.

Poxy virus!

The employer pays the staff on the normal payroll.  HMRC then pays 80% (up to the ceiling level) to the employer.  

(You can choose to pay the staff anything between 80% and 100% of their normal salary.  You can defer other payments such as pension contributions.  You have to have seek and get the agreement of the staff). 

Thanks.  I'm happier this way as I know my guys will get paid on time and that is my priority.

I'll let my mate's daughter know her boss has the wrong end of the stick (or is maybe just trying it on)

The last point (that the member of staff has to agree to being furloughed) is often missed.

Very true, but the conversation could go something like: "There is no work for you to do and we have two options, furlough where you will get 80% of your pay, or redundancy. You don't have to agree to be furloughed, but regrettably if you do not agree then there will be no alternative but to make your role redundant".

Hmmm tricky one!

That position is not difficult to defend at all - irrespective of length of service.

cafcfan1990 said:

bobmunro said:

Chizz said:

Swisdom said:

Chizz said:

Swisdom said:

My understanding up until this point is the I, as the employer, will pay any furloughed staff the 80% of their salary and then claim it back from HMRC however a friend's daughter was told yesterday she will get paid by HMRC and her boss cannot guarantee when this will be. (HMRC apparently "aim" to pay within 6 working days)

Obviously 2 very different scenarios and with the system on HMRC not being set up until Monday 20th April...and highly likely to crash on day one...I'm wondering if this is going to be a massive clusterfuck and people will get paid late etc etc

Anyone got any insight on this as much of the wording I have found online is so fucking woolly and non--comittal however I found something on the CIPD website yesterday that implied HMRC will be paying the individuals however my accountant is of the opinion I will pay it and reclaim.

Poxy virus!

The employer pays the staff on the normal payroll.  HMRC then pays 80% (up to the ceiling level) to the employer.  

(You can choose to pay the staff anything between 80% and 100% of their normal salary.  You can defer other payments such as pension contributions.  You have to have seek and get the agreement of the staff). 

Thanks.  I'm happier this way as I know my guys will get paid on time and that is my priority.

I'll let my mate's daughter know her boss has the wrong end of the stick (or is maybe just trying it on)

The last point (that the member of staff has to agree to being furloughed) is often missed.

Very true, but the conversation could go something like: "There is no work for you to do and we have two options, furlough where you will get 80% of your pay, or redundancy. You don't have to agree to be furloughed, but regrettably if you do not agree then there will be no alternative but to make your role redundant".

Hmmm tricky one!

That position is not difficult to defend at all - irrespective of length of service.

I think the only problem is where the business is still open but needs less staff. 

My brother in law is a mechanic and they are still open but wanted to reduce the staff. They needed to reduce the staff by keeping some working and furloughing others. In that position it’s tricky if you have staff refusing to furlough. You can’t make them all redundant as they have work on, just much less of it.  

cafcfan1990 said:

bobmunro said:

cafcfan1990 said:

bobmunro said:

Chizz said:

Swisdom said:

Chizz said:

Swisdom said:

My understanding up until this point is the I, as the employer, will pay any furloughed staff the 80% of their salary and then claim it back from HMRC however a friend's daughter was told yesterday she will get paid by HMRC and her boss cannot guarantee when this will be. (HMRC apparently "aim" to pay within 6 working days)

Obviously 2 very different scenarios and with the system on HMRC not being set up until Monday 20th April...and highly likely to crash on day one...I'm wondering if this is going to be a massive clusterfuck and people will get paid late etc etc

Anyone got any insight on this as much of the wording I have found online is so fucking woolly and non--comittal however I found something on the CIPD website yesterday that implied HMRC will be paying the individuals however my accountant is of the opinion I will pay it and reclaim.

Poxy virus!

The employer pays the staff on the normal payroll.  HMRC then pays 80% (up to the ceiling level) to the employer.  

(You can choose to pay the staff anything between 80% and 100% of their normal salary.  You can defer other payments such as pension contributions.  You have to have seek and get the agreement of the staff). 

Thanks.  I'm happier this way as I know my guys will get paid on time and that is my priority.

I'll let my mate's daughter know her boss has the wrong end of the stick (or is maybe just trying it on)

The last point (that the member of staff has to agree to being furloughed) is often missed.

Very true, but the conversation could go something like: "There is no work for you to do and we have two options, furlough where you will get 80% of your pay, or redundancy. You don't have to agree to be furloughed, but regrettably if you do not agree then there will be no alternative but to make your role redundant".

Hmmm tricky one!

That position is not difficult to defend at all - irrespective of length of service.

I think the only problem is where the business is still open but needs less staff. 

My brother in law is a mechanic and they are still open but wanted to reduce the staff. They needed to reduce the staff by keeping some working and furloughing others. In that position it’s tricky if you have staff refusing to furlough. You can’t make them all redundant as they have work on, just much less of it.  

Redundancy is where work has ceased or diminished - and in the example you give it has diminished.

You can make some redundant or furlough some, but assuming the workers are all in the same 'pool' for redundancy/furlough then you would need a selection process using fair criteria.

Ah I agree they have the reasons for redundancy, but selecting them isn’t going to easy. I doubt it’s going to be a problem, I can’t imagine many people want to work full time for full pay if they can do nothing for 80% of it. Just saying i think the issues some businesses will face is in my example. You could have staff wanting 100% pay so refusing furlough, or alternatively you have employees complaining they are doing 40 more hours then one of their colleagues for effectively around 13% extra net pay. 

My Mrs’s firm, Estée Lauder, have told her that she is on this and will get paid 100% of here basic as normal. They will then be claiming the 80% back from HMRC.

She has been doing loads of conference calling and has been given "exercises" to do during the last couple of weeks, which I thought would be against the rules (seeing as the Government are paying her), but she was told that as long as she isn't selling for them, they can ask her to carry on? She doesn't mind this, but she has recently been asked to pretend she a QVC presenter and film herself selling certain things. It’s all supposedly meant to be good for their wellbeing, but it's been giving her sleepless nights at the moment.....

Swisdom said:

My understanding up until this point is the I, as the employer, will pay any furloughed staff the 80% of their salary and then claim it back from HMRC however a friend's daughter was told yesterday she will get paid by HMRC and her boss cannot guarantee when this will be. (HMRC apparently "aim" to pay within 6 working days)

Obviously 2 very different scenarios and with the system on HMRC not being set up until Monday 20th April...and highly likely to crash on day one...I'm wondering if this is going to be a massive clusterfuck and people will get paid late etc etc

Anyone got any insight on this as much of the wording I have found online is so fucking woolly and non--comittal however I found something on the CIPD website yesterday that implied HMRC will be paying the individuals however my accountant is of the opinion I will pay it and reclaim.

Poxy virus!

i_b_b_o_r_g said:

My Mrs’s firm, Estée Lauder, have told her that she is on this and will get paid 100% of here basic as normal. They will then be claiming the 80% back from HMRC.

She has been doing loads of conference calling and has been given "exercises" to do during the last couple of weeks, which I thought would be against the rules (seeing as the Government are paying her), but she was told that as long as she isn't selling for them, they can ask her to carry on? She doesn't mind this, but she has recently been asked to pretend she a QVC presenter and film herself selling certain things. It’s all supposedly meant to be good for their wellbeing, but it's been giving her sleepless nights at the moment.....

i_b_b_o_r_g said:

Apparently it's fine, and even encouraged by the Government, to train staff who have been furloughed?