Wednesday 16 September 2020

HMRC makes changes to calculations for claims

HMRC has updated its guidance on how to perform usual hours calculations where employees come off furlough or flexible furlough partway through a claim period. The change affects claims made from 14 September.

HMRC has made changes for claims made from 14 September 2020. HMRC has added a new subheading:

“Calculating the number of working and furloughed hours for an employee that comes off furlough or flexible furlough partway through a claim period.”

The guidance states:

“If your employee stops being furloughed or flexibly furloughed partway through a claim period, when calculating the number of furloughed hours you can claim for, make sure you:

  • only calculate the employee’s usual hours up to the last day of furlough, instead of to the end of the claim period
  • do not include any working hours after the last day of furlough.”

HMRC has stated that employers do not need to amend claims made prior to 14 September, but they should use this calculation for any claims from 14 September 2020, for an employee who stops being furloughed or flexibly furloughed partway through a claim period.

If we are making your claims we will make the calculation adjustments for post 14 September claims and if you are doing your own claims please click here for further information.

 Friday 11 September 2020

Notify HMRC of over claimed CJRS “furlough” grants within 90 days

The calculation of Coronavirus Job Retention Scheme grants has proven to be complex, particularly as HMRC frequently changed the rules and the method of computation. Consequently, many errors have arisen and need to be corrected.

The latest Finance Act requires employers to notify HMRC within 90 days where it turns out that they were not entitled to receive the furlough grants and there is a penalty for failure to notify them.

HMRC has said that it will be lenient in relation to genuine mistakes, and that penalties will be charged only in cases of deliberate non-compliance.

For more information click here.

Numerous fraudulent CJRS claims identified

HMRCs CJRS fraud reporting portal had received over 2,000 reports of wrongful claims. Examples of such wrongful claims include;

  • Claiming furlough payments for staff who are continuing to work
  • Furloughing staff but asking them to work “voluntarily” on an unpaid basis.
  • Claiming furlough payments for “ghost” employees, and those who left employment before 19 March 2020.
  • Not passing on the full amount of furlough pay to staff.
  • Failing to account for PAYE tax and NIC in relation to furlough payments

HMRC also have the power to transfer CJRS penalties to the directors of an insolvent company if their company does not pay them. We therefore suggest that employers should check the accuracy and validity of their CRJS claims as a matter of priority, and ensure that any inaccuracies or errors are disclosed to HMRC as quickly as possible. We can of course assist you in checking claims.

 Friday 28 August 2020

CJRS – Download a template if you’re claiming for 100 or more employees

HMRC has released an updated excel template in XLS. and similar formats for employers with more than 100 employees. The template can be found here.

Monday 24 August 2020

CJRS Update

What you need to do from 1 September

  • From 1 September CJRS will pay 70% of usual wages up to a cap of £2,187.50 per month for the hours furloughed employees do not work.
  • You will still need to pay your furloughed employees at least 80% of their usual wages for the hours they do not work, up to a cap of £2,500 per month. You will need to fund the difference between this and the CJRS grant yourself.
  • The caps are proportional to the hours not worked. For example, if your employee is furloughed for half their usual hours in September, you are entitled to claim 70% of their usual wages for the hours they do not work up to £1,093.75 (50% of the £2,187.50 cap).
  • You will continue to have to pay furloughed employees’ National Insurance (NI) and pension contributions from your own funds.

Making sure your data is right

It is important that you provide all the data HMRC need to process your claim. Payment of your grant may be at risk or delayed if you submit a claim that is incomplete or incorrect, so we want to help you get this right.

You can find everything you’ll need to help make your claim here.

 Thursday 20 August 2020

Employment Allowance (EA)

The allowance increased to £4,000 from 6 April 2020. HMRCs guidance informs us that it is possible to delay claiming the employment allowance whilst claiming for NICs under the Coronavirus Job Retention Scheme.

Employers who delay their Employment Allowance claim and have unused Employment Allowance available at the end of the tax year can use this to reduce other tax costs. Employers who have received a grant for employer NICs costs through the scheme should deduct the amount of grant they have received from the amount of Employment Allowance they have left before they use it, if not doing so would result in receiving relief for the same cost twice.

 Thursday 13 August 2020

Make sure you’re paying the correct workplace pension contributions

The Pensions Regulator (TPR) would like to remind you that your workplace pension duties apply whether your staff are working or are being furloughed as part of the Coronavirus Job Retention Scheme. However, since the beginning of August you have needed to pay the pension contributions and National Insurance contributions for your furloughed staff. You will still be able to claim the lower of 80% of staff wages or £2,500 per month for these staff, reducing to the lower of 70% or £2,187.50 per month in September and the lower of 60% or £1,875 in October, with the scheme closing on 31 October.

Read TPRs guidance to find out more about how to calculate normal pension contributions for furloughed workers who are returning to work part-time, including where there are salary sacrifice arrangements for pensions in place and what to do if your company is struggling to pay contributions. TPR will continue to monitor employer actions to ensure compliance with ongoing duties.

If you offer a defined benefit pension for your staff, you’ll also find the latest information about what to do if you have been temporarily suspending or reducing deficit repair contributions for the scheme via TPRs COVID-19 webpage.

Monday 10 August 2020

CJRS & National Insurance

Reminder of changes to CJRS

From 1 August 2020 CJRS continues to provide grants for furloughed employees but no longer funds employers’ National Insurance (NI) and pension contributions. You now have to make these payments from your own resources for all employees, whether furloughed or not. HMRC guidance has been updated to reflect these changes.

Making sure your data is right

It is important that you provide the data HMRC need to process your claim. Payment of your grant may be at risk or delayed if you submit a claim that is incomplete or incorrect. HMRC may be in touch to request employee data if it’s missing from your previous claims.

National Insurance numbers

You need to provide a National Insurance number (NINO) for all employees as part of your CJRS claim. The only exception is in the very limited circumstances where an employee genuinely does not have a NINO, for example if they are under 16 years old.

If you are claiming for an employee whose NINO you do not currently know, you can check their number by searching GOV.UK for 'Check a National Insurance Number using basic PAYE Tools'.

HMRC can no longer accept claims for fewer than 100 employees by phone where you do not have all employee NINOs unless the employees you are claiming for genuinely do not have these.

Tuesday 4 August 2020

Job Retention Bonus

Click here for more information about the eligibility requirements and what employers need to do now to claim the bonus. Full guidance will be published by the end of September. 

Thursday 30 July 2020

What to Do If You Have Claimed Too Much or Not Enough from the Coronavirus Job Retention Scheme

If you have claimed too much or if you want to delete a claim in the online service, you must do this within 72 hours.

If you have made an error in a claim that means you have received too much, you must pay this back to HMRC. You can either:

  • tell HMRC as part of your next online claim (your new claim will be reduced, and you’ll need to keep a record of the adjustment for 6 years)
  • contact HMRC to pay the money back (you should only do this if you’re not submitting another claim)

If you’ve over claimed a grant and have not repaid it, you must notify HMRC by the latest of either:

  • 90 days after the date you received the grant you were not entitled to
  • 90 days after the date you received the grant that you were no longer entitled to keep because your circumstances changed
  • 20 October 2020

If you do not do this, you may have to pay a penalty. If you do repay any over claimed grant, this will prevent any potential tax liability in respect of the over payment of Coronavirus Job Retention Scheme. HMRC will not be actively looking for innocent errors in their compliance approach. 

Find out more about when you may have to pay a penalty and other information, including:

  • how HMRC decides how much the penalty will be
  • when HMRC will not charge a penalty
  • how to appeal against a penalty

For more information click here.

If You Have Not Claimed Enough

If you have made an error that has resulted in receiving too little money, you will still need to ensure you pay your employees the correct amount. You should contact HMRC to amend your claim. As you are increasing the amount of your claim, they may need to conduct additional checks.

After 31 July, you will no longer be able to amend a claim relating to the period up to 30 June to add an employee that should have been included on a claim submitted before that date. You must make sure that any remaining claims still to be made for the period to 30 June include all of your eligible employees. Amendments for any other errors you made that resulted in you not claiming enough will still be permitted after 31 July.

For the full details click here.

Tuesday 14 July 2020

Summer Economic Update

On 8th July, the Chancellor Rishi Sunak made a speech entitled “Summer Economic Update” where he unveiled further Government supports and he unveiled the Government’s plan for jobs which he described as the “Second phase in the Government’s economic response to the crisis.”

Please see our July e-news for the highlights on the following announcements:

  • Coronavirus Job Retention Scheme (CJRS) and Job Retention Bonus
  • Kickstart Scheme and Measures to Help People Find Work
  • Value Added Tax Reduced Rate for Hospitality and Tourism Sectors
  • Eat Out To Help Out Scheme
  • Stamp Duty Land Tax Holiday
  • Residential Rates on Purchases from 8 July 2020 to 31 March 2021

Wednesday 8 July 2020

Economic Update

Today the Chancellor, Rishi Sunak, set out plans for the next stage of our economic recovery. Important announcements:

  • Companies will receive a £1,000 bonus for each furloughed employee who is still employed as of 31 January 2021. 
  • From today until 31 March 2021, buyers will pay no Stamp Duty on the first £500k when they move home. Nearly 9 out of 10 people getting on or moving up the property ladder will pay no Stamp Duty at all.
  • The Government will cut the rate of VAT applied on tourism and hospitality related activities from 20% to 5% for six months.

More information on all the Chancellors announcements can be found here.

Friday 19 June 2020

CJRS Update

Please note that HMRCs online calculator can only be used for furlough claims ending on or before 30 June. After this date, you will need to work this out. This means that for any employees who you are flexibly furloughing, you’ll need to do a series of calculations to work out what the furlough pay will be for the usual hours that your employee is not working during your claim period.

Further guidance on how to calculate what you can claim can be found in the links below.

Example of how to calculate the amount you should claim for an employee who is flexibly furloughed

Examples of how to calculate your employees' wages, National Insurance contributions and pension contributions

HMRC have provided a webinar on how the scheme is changing please click here to book your place.

Thursday 11 June 2020

Coronavirus Job Retention Scheme Updates

For periods starting on or after the 1 July, the maximum number of employees you can claim for in any period cannot be higher than the maximum number you have claimed for in a previous period. For example, if your highest single claim for periods up to 30 June was for 100 people, you can’t claim for more than this number in later periods.

Parents Returning to Work after Extended Leave Eligible for Furlough

People on paternity and maternity leave who return to work in the coming months will be eligible for the government’s furlough scheme, HM Treasury announced 9 June.

In essence:

  • Parents on statutory maternity and paternity leave who return to work in the coming months will be eligible for furlough scheme even after 10 June cut-off date
  • Coronavirus Job Retention Scheme will close to new entrants at the end of June as new flexibilities are introduced to support economy
  • This will only apply where they work for an employer who has previously furloughed employees
  • This also applies to people on adoption leave, shared parental leave, and parental bereavement leave.

Making Changes to Your Claims If You Have Over-Claimed

If you’ve made an error in a CJRS claim that means you received too much money, you must pay this back to HMRC.

HMRC have updated the application system so you can tell them if you have over-claimed in a previous claim – when you apply you’ll be asked if you need to reduce the amount to take account of a previous error. Your new claim amount will be reduced to reflect this. You should then keep a record of this adjustment for six years.

If you have made an error in a CJRS claim and do not plan to submit further claims, HMRC are working on a process that will allow you to let them know about your error and pay back any amounts that you have over-claimed. We will update guidance and keep you informed when this is available.

Tuesday 2 June 2020

Job Retention Scheme - Flexible Furloughing and Important Dates

The Chancellor has announced major changes to the Coronavirus Job Retention Scheme (CJRS). HMRC have outlined the details below; see how you might be affected.

From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. When claiming the CJRS grant for furloughed hours employers will need to report and claim for a minimum period of a week.

If your employees are unable to return to work, or you do not have work for them to do, they can remain on furlough and you can continue to claim the grant for their full hours under the existing rules.

Employer contributions

From August, the government grant will be tapered as follows:

  • For June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and minimum auto-enrolment pension contributions for the hours the employee does not work – employers will have to pay employees for the hours they work (applicable from 1 July).
  • In August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions.
  • From 1 September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
  • For the final month of the scheme in October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
  • The cap on the furlough grant will be proportional to the hours not worked.

Important dates

It is important to note that the scheme will close to new entrants from 30 June. From this point onwards, you will only be able to furlough employees that you have furloughed for a full three-week period prior to 30 June.

This means that the final date that you can furlough an employee for the first time will be 10 June for the current three-week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

The Chancellor has confirmed that the CJRS will close on 31 October.

Guidance and support

Further support on how to calculate claims with the extra flexibility will be available by 12 June and we will keep you informed about the details and your written requirements in due course. If you have any questions please contact us. See more details here.

Wednesday 13 May 2020

Chancellor Extends Furlough Scheme Until October

The government’s Coronavirus Job Retention Scheme will remain open until the end of October, the key points announced by Chancellor Rishi Sunak are:

  • Coronavirus Job Retention Scheme will continue until end of October
  • furloughed workers across UK will continue to receive 80% of their current salary, up to £2,500
  • new flexibility will be introduced from August to get employees back to work and boost economy

The Government stated as we reopen the economy, we need to support people to get back to work. From the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff.

The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month.

New statistics published today revealed the job retention scheme has protected 7.5 million workers and almost 1 million businesses.

The scheme will continue in its current form until the end of July and the changes to allow more flexibility will come in from the start of August.

More specific details and information around its implementation will be made available by the end of this month.

The government will explore ways through which furloughed workers who wish to do additional training or learn new skills are supported during this period. It will also continue to work closely with the Devolved Administrations to ensure the scheme supports people across the Union.

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.

Tuesday 21 April 2020

HMRCs Coronavirus job retention scheme portal is now live

HMRCs online portal for furlough claims opened yesterday (20th April), click here to make a claim online.

The scheme is now open to employees that were on the payroll prior to 19 March 2020, previously this was 28 February 2020. Please note an RTI submission must have been made prior to 19 March 2020 for those employees to be included.

The government have also extended the scheme to run up to the end of June 2020.

Details of how to calculate the claim can be found here.

Payroll clients of Humphrey & Co can either opt for the calculations and claim to be prepared for them, or they can prepare these themselves. All payroll clients should have received an email over the weekend detailing their options to them.

For those clients enjoying protection under our Tax Investigation Service, our time will be covered in connection with any enquiries HMRC subsequently make.

Wednesday 15 April 2020

Genuine HMRC contact and recognising phishing emails and texts

Please beware of emails and messages pertaining to be from HMRC. Take extra caution at this time and do not click on links or share personal details. Please talk to us if you want to confirm whether any correspondence is genuine. Find out how to recognise when contact from HMRC is genuine, and how to recognise phishing or bogus emails and text messages by clicking here.