As you will be aware, part of the government’s support for businesses during the coronavirus outbreak is the opportunity to put employees or directors on a period of “furlough” leave during which the Government will reimburse 80% of the employee’s normal wages (subject to a cap of £2,500 per month), plus the employer’s NIC and statutory pension contributions. The guidance is slowly developing but there are still many unanswered questions, and we will do our best to keep you up to date with the key developments as they arise. However, it is clear from our discussions with many of our clients that you may like our assistance to prepare the payroll calculations and submit your refund claims to HMRC when the portal is available. This article sets out a plan of the next steps for businesses, as well as how our team at DTE can support you.
Urgent action needed – PAYE online registration
The updated guidance issued by HMRC on Saturday says that a business must have enrolled for the PAYE online service that is available through the Government gateway. This can take up to 10 days because it requires HMRC to issue an authorisation code which is sent to you in the post. If you have not registered for PAYE online, you can follow the registration process at www.gov.uk/paye-online/enrol.
How we can help
The additional services that we can offer in connection with the Coronavirus job retention scheme are:
Calculate the amount that can be reclaimed from the Government for each of your furloughed employees, or alternatively review your calculations of the reclaim amounts, Help you to deal with various situations, including the interaction of the furlough scheme with SSP, SMP, NMW, company directors, benefits in kind, salary sacrifice etc, and Submit your claim(s) to HMRC using the online portal when it opens later in April.As you can submit a claim once every three weeks, you may need to file more than one claim on the portal. For clients that operate salary sacrifice schemes, please note that HMRC agrees that the coronavirus pandemic counts as a “life event” that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly. If you and your employees wish to make changes to existing salary sacrifice arrangements, we can also support you with these changes and any consequential changes to your payroll calculations.
Engagement terms
Our fees for this work will be based on our standard hourly rates for payroll services. Clearly the amount of work will vary significantly based on the size and complexity of each business, so we will provide you with a fee quote before starting work if requested.
Actions to be taken now
If you have not already put employees on furlough but are considering it, the steps that you should take are:
communicate with your employees that they are to be furloughed and ask for their agreement in writing (this is important as putting them on furlough leave may be a change to their employment terms), advise each affected employee that they are on furlough leave from the relevant date either for a fixed period (which is not less than 3 weeks) or for the foreseeable future with regular reviews, the employees must not work during the period of furlough leave, and continue to pay the employees as normal through payroll. You only have to pay them 80% of their normal salary and this amount, plus the employer’s NIC and 3% pension contributions, will be refunded once the furlough scheme is open. You can choose to pay them their full salary if you wish, but the 20% uplift will not be reimbursed.If you have already put employees on furlough, it is important to be ready to submit your first furlough claim as soon as possible after the portal is open. Please get in touch with us today via [email protected] for further support.
This article was originally published on the DTE website. For further updates and advice for businesses regarding the current coronavirus crisis, visit our Covid-19 Business Support Hub.