From today 20 April 2020 you are now able to make a claim using HMRC’s online portal with regards to furloughing staff under the Coronavirus Job Retention Scheme. This can be done through your HMRC PAYE online account.

Useful links:

For the link with HMRC’s step by step guide in order to make the claim Click Here

To access the HMRC useful guide which explains how to calculate the claim including a calculator which you can populate to work out the correct claim for you Click Here

Once you have made the claim – you will need to keep a note of your claim reference number and retain all records and calculations relating to your claims.

HMRC aims to make payments in 6 working days.

MATTERS TO CONSIDER:

Calculation – HMRC are calculating the furloughed pay based on calendar days in a month rather than working days

Amounts to include  – It has now been confirmed that non-discretionary overtime, fees and commission payments can be included within the calculation. Any tips, discretionary bonuses or commission payments must be excluded.

Employers national insurance – HMRC said they will cover the employers national insurance on the furloughed salary amount but only if this is not already covered by the Employment Allowance. If the employers national insurance is covered by the Employment Allowance, you must not make a claim for this

Directors – the Government has stated that directors can be furloughed under the scheme. However, directors need to be aware that ‘they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company‘. This is what the actual guidance states:

Company Directors

As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.

Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose, i.e. they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.

This also applies to salaried individuals who are directors of their own personal service company (PSC).

We must emphasise that the guidance has been updated three times since the Chancellor’s Direction to HMRC was released last week and the wording above has not been altered. So the acid test is that you ‘should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company’.

Abuse of Furlough

The Government have made it clear that the misuse and abuse of furlough will result in not just civil but also criminal prosecution.

Contact us for further help and guidance.