Coronavirus Job Retention Scheme Claims – do you need help?.

Article | Derek Carr | 1st June 2020

If you have any questions or concerns please do not hesitate to speak to your PEM contacts directly

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Do you qualify for a government grant and do you need help now?

The government’s Coronavirus Job Retention Scheme is a temporary scheme designed to provide financial support in the form of a grant to employers who have been impacted by COVID-19.

The scheme is intended to run until at least 31 October 2020 and enables employers to classify qualifying employees / directors as “furloughed employees”. More detail on the Job Retention Scheme is available here.

Employers can claim for salaried or weekly paid employees as well as those on variable hours and zero rated contracts. For salaried employees, the amount that could be claimed until 31 August 2020 is the lower of:

  • 80% of the employee’s actual gross salary in the last pay period prior to 19 March 2020 which includes wages, past overtime, fees and compulsory commission payments (pro-rata for any qualifying employees employed for less than one month); or
  • £2,500 per month;

Claims from 1 July onwards may only be made for employees first placed on furlough on or before 10 June 2020. Whilst the furloughed employee will see no change in the amounts paid to them whilst on furlough leave, in changes designed to share the cost burden with employers, the amounts that may be claimed from HMRC will change on 1 September 2020 to 70% and £2,187.50 respectively, and from 1 October 2020, to 60% and £1,875 respectively.

Furthermore, for periods on or prior 31 July 2020, an employer may claim the associated Employers’ National Insurance Contributions (noting the interaction with the Employment Allowance) and minimum auto-enrolment employer pension contributions on the furloughed wage. From 1 August 2020 onwards, the employer will pay these Employers’ National Insurance Contributions and minimum auto-enrolment employer pension contributions.

Importantly, the calculation does not include discretionary bonus (including tips) or discretionary commission payments or expenses reimbursed by the employer.

There are different calculations for employees on variable hours or zero hours contracts and rules relating to those employees on maternity leave or receiving paternity pay.

How to apply

The HM Revenue & Customs (HMRC) online portal service opened on 20 April 2020 to enable employers to submit their claims for financial support for furloughed workers.

It was announced on 29 May that all claims for the period ending 30 June 2020 must be made by 31 July 2020.

How the PEM Employment Tax Team can help you

PEM can help you to maximise your claim for this government grant leaving you to focus on your business during these unprecedented times. PEM are here to help and support you when you need us most by:

  • Assessing the cashflow and employer cost impact of asking employees / directors to agree to the furlough status;
  • Confirming the information that employers should be collating in preparation for making a claim under the HMRC portal;
  • Answering your queries around eligibility under the scheme – some employees’ circumstances mean they do not at first glance appear to be eligible to be paid under the scheme, but this needs to be carefully considered to make sure your employees do no miss out;
  • Assisting with the registration of your claim on the HMRC portal;
  • Reviewing the alternative methods of computing the furloughed pay to maximise the amounts that you can claim back;
  • Enhancing your claim to ensure that you are repaid the full amount due for Employer’s National Insurance Contributions and the automatic enrolment employer pension contributions;
  • Advising on the payroll changes or by operating your payroll for you, be it weekly or monthly; and
  • Ensuring you are fully aware of the financial and accounting implications of making claims under the Coronavirus Job Retention Scheme, to help you to minimise the economic losses within your business.

If you need help please contact:

The PEM Payroll Bureau are fully staffed and waiting to help you

If you need urgent assistance with your payroll obligations during this extremely difficult time please contact:

About the author

Derek Carr

Derek joined PEM in April 2002 and has held the position of Tax Partner since 2004 and became our Chairman in 2017.

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