The first Coronavirus employer grant claim portal went live on Monday 20 April 2020. This has been updated as of 31-Oct-2020 to reflect the fact that the November 2020 Furlough scheme will be in line with this. We’ve updated this article to reflect the new scheme. We’ve heard lots about furloughing, published blogs, done live Q&A broadcasts. Lot’s been shared with those on our mailing list. Our next step is to outline the thing you’ve all been waiting for, making that grant claim when the doors open.
Before we get down to the good part, making the claim, a quick reminder on some of the important bits.
The furloughing employer grant is there to help those employers maintain a workforce. Think of furloughing as your employees and directors being put into hibernation, and you get money for it.
The coronavirus employer grant is part of a raft of measures we’ve looked at these in previous blogs.
The coronavirus employer grant claim scheme is open to all UK employers, initially for at least four months starting from 1 March 2020, claim period ending 30 June 2020. It is designed to support employers whose operations have been severely affected by coronavirus (COVID-19).
Who can claim?
Any UK organisation with employees can apply, including businesses and charities
Eligible Employees
A wide category of employees are eligible, from full-time employees to those employees on flexible or zero-hour contracts. Company directors can be furloughed, even if your company only has one director. If you are a sole director, being paid via PAYE, you can furlough yourself. Conditions still apply, for example no work being undertaken, minimum period of time.
Conditions
Sorry to be party poopers, but there are conditions, these are
- Your furloughed employees cannot do any work for your business. It’s one thing or another, working or not working, no half way house.
- The minimum period of being furloughed is three weeks, lots of Daytime TV and gardening
- It’s not unusual for people to have more than one job. COVID 19 furlough applies to each job. Each job is separate, and the cap applies to each employer individually.
- Paperwork, processes and evidence. If you ignore this then you haven’t followed the rules, and it’s in eligible clams and pay back money time
Procedures
Employers should write to their employee confirming that they have been furloughed, make sure you keep records. For companies, don’t forget your board minutes and records
Employees not eligible for COVID 19 furloughing
- Those hired after 30 November 2020.
- Your employees who are on unpaid leave after 30 November 2020.
- Any of your employees on Statutory Sick Pay
How much you can claim?
- The lower of 80% of an employee’s regular wage or £2,500 per month
- You can’t claim your employer national insurance contributions
- You can’t claim automatic enrolment employer pension contributions on that furloughed pay.
LET’S TALK NUMBERS
The grant, which is what you are claiming is based on your regular, contractual pay, such as wages, compulsory commission and past overtime.
Employees will either have fixed or variable pay. Check out our previous blogs for an illustration for those varying situations.
Furlough grant claim
Timings and things to note
- You cannot make more than one claim during a claim period
- Make your claim shortly before or during running your payroll.
- Claim for all employees in each period at one time as you cannot make changes to your claim.
- The claims can run from 1 March if applicable.
- Once your have submitted your claim, your money will be on its way to your UK bank account six working days after
- Only claim for employees that have been furloughed
You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.
Make sure you gather together all the information together. The application will need to done in one session. There is currently no save and return option. Sessions will time out after 30 minutes of inactivity.
Minimise distractions, don’t do it while multi-tasking, or cat videos, that treat is for after.
Key information to gather before making the claim
- How many employees are being furloughed
- The dates employees have been furloughed to and from
- Details of employees – the name and National Insurance Number of each furloughed employee
- Your employer PAYE scheme reference number
- The Corporation Tax Unique Taxpayer Reference, Self-Assessment Unique Taxpayer Reference or Company Registration Number for your business
- UK bank account details
- Registered name for your business
- Your business address
Payment will be made six working days after making an application. If you have an authorised agent, decide whether you want to make your own claim or if you want your agent to act on your behalf.
If you are using an agent, as our clients are, make sure there is agent authority to deal with PAYE matters online.
One claim per reference period. The reference period is the date your payroll is run, so your claim shortly before or during running payroll.,
For example
Straight out of the HMRC guide, so you can check our workings for the Corona Virus Employer Grant Claim. In addition, we’ve added another example
An employee is paid a regular, fixed monthly salary on the last day of each month. They are also auto-enrolled into the workplace pension. The employee agreed to be placed on furlough from 21 March 2020, at 80% of their salary.
We’ve put together a table summary using HMRC figures, assumes you pay 80% of the ‘regular’ salary in the Furlough period. Above all , if you pay less, no claim, most importantly if you pay more your grant will be capped to the lower of what the gross pay is, and £2,500 for that furlough period.
| Regular Pay | £2,400.00 | Capped Grant | £2,500.00 |
|---|---|---|---|
| Days in March 2020 | 31 | 31 | |
| Daily rate (2 d.p.) | £77.42 | £80.65 | |
| March 2020 claim | March 2020 claim | March 2020 claim | |
| Non Furloughed Period | Furloughed Period | Total | |
| Days | 20 | 11 | 31 |
| Regular Pay | £1,548.40 | £851.62 | |
| Grant, lower of 80% of Regular Pay | £681.30 | ||
| £2,500 at daily rate | £887.15 | ||
| March Pay | £1,548.40 | £681.30 | £2,229.70 |
| Employers NIC | £134.45 | £74.03 | £208.48 |
| Employers Pension Contributions | £36.54 | £14.99 | £51.53 |
| Total Pay & Grant | £1,719.39 | £770.32 | £2,489.71 |
| NOTES | |||
| HMRC Guide uses daily figures | |||
| E'er NIC Threshold | £719.00 | ||
| E'er NIC rate | 13.8% | ||
| Pension Qualifying Earnings | £512.00 | ||
| Pension Earnings in Furlough Period | £181.72 | ||
| Minimum Pension Rate | 3% |
| Regular Pay | £3,500.00 | Capped Grant | £2,500.00 |
|---|---|---|---|
| Days in March 2020 | 31 | 31 | |
| Daily rate (2 d.p.) | £112.90 | £80.65 | |
| March 2020 claim | March 2020 claim | March 2020 claim | |
| Non Furloughed Period | Furloughed Period | Total | |
| Days | 20 | 11 | 31 |
| Regular Pay | £2,258.00 | £1,241.90 | |
| Grant, lower of 80% of Regular Pay | £993.52 | ||
| £2,500 at daily rate | £887.15 | ||
| March Pay | £2,258.00 | £887.15 | £3,145.15 |
| Employers NIC | £216.01 | £118.80 | £334.81 |
| Employers Pension Contributions | £57.83 | £21.16 | £78.99 |
| Total Pay & Grant | £2,531.84 | £1,027.11 | £3,558.95 |
| NOTES | |||
| HMRC Guide uses daily figures | |||
| E'er NIC Threshold | £719.00 | ||
| E'er NIC rate | 13.8% | ||
| Pension Qualifying Earnings | £512.00 | ||
| Pension Earnings in Furlough Period | £181.72 | ||
| Minimum Pension Rate | 3% |
The numbers are for March 2020, the last month of the 2019-20 tax year. In April 2020 NIC threshold rates and pension qualifying earnings change. Sorry if your head is hurting with this, that’s what you accountant is there for, to take that pain away.
For more varied and detailed examples check out those guys at HMRC.
Large employers
If you are an employer with more than 100 employees you will need to provide more detail in your submission and upload your workings to be marked by the headmaster.
You will also need to upload the claim information in one of the following formats: • XLS, XLSX, CSV, ODP
Good to know
Certainly don’t contact HMRC to check the status of your Furloughing Employer Grant claim. They will not be able to provide you with that information.
Payments may be withheld or may need to be repaid in full to HMRC if the claim is based on dishonest or inaccurate information or found to be fraudulent.
Conclusion
In conclusion, take a look at our regular blogs, and a weekly podcast ‘I Hate Numbers’ – these aren’t all about COVID 19 by the way! Subscribe to the podcast, and give it a review so that we can share that Numbers love. Connect with us on our social media channels, such as Facebook , Instagram , Twitter and You Tube , we share details as to what’s going on and do out Live broadcasts and Q&A – it’s not Hollywood or Netflix, but there’s no BS
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