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Coronavirus Job Retention Scheme – How to Claim

We’ve produced a quick ‘at a glance’ overview on how to claim for your furloughed employees wages. For more information please read our latest update on the scheme found here.

What you can claim for

  • 80% of your employees wages up to a maximum of £2500, this includes people on the minimum wage
  • Minimum automatic enrolment employer pension contribution on the subsidised wage
  • Employer National Insurance contributions on your furloughed employees pay 

What is included in the calculation of employees wages:

  • Pay
  • Past overtime
  • Fees and compulsory commission payments

What is excluded from the calculation of employees wages:

  • Discretionary bonuses
  • Tips/gratuities
  • Discretionary commission payments
  • Non-cash payments
  • Taxable benefits in kind
  • Benefits provided through salary sacrifice e.g. pension payments

Note – HMRC has agreed that Covid-19 counts as a life event that could warrant changes to salary sacrifice arrangements

What isn’t covered

  • Apprenticeship levy
  • Student loans
  • Additional National Insurance of pension contributions you make to top up employees salaries
  • Any pension contributions that you make above the mandatory employer contribution 

Making a claim

  • To make a claim you will need:
    • your employer PAYE reference number
    • the number of employees being furloughed
    • National Insurance numbers for the employees you want to furlough
    • Names of the employees you want to furlough
    • Payroll/works number for the employees you want to furlough (optional)
    • your Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number
    • the claim period (start and end date)
    • amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
    • your bank account number and sort code
    • your contact name
    • your phone number

Where there are fewer than 100 furloughed employees details for each employee will need to be entered into the system – this will include their name, National Insurance number, claim period and claim amount and payroll/employee number (optional).

Where there are more than 100 furloughed employees a file will need to be uploaded with the information detailed in the last paragraph rather than input directly into the system.  HMRC will accept the following file types: .xls, .xlsx, .csv, .ods.

  • Calculate the amount you are claiming:
    • a claim can only be made shortly before, or as you are undertaking the payroll run. While the guidance gives no definition of ‘shortly before’ the principle idea of the total guidance to date is that it is not possible to make a claim in advance of running the payroll
    • if you do not intend to ‘top-up’ the employee’s pay for the 20% of income not covered by the grant, you need to ensure that the payroll is processed using only the amount calculated as available to claim under the grant
    • HMRC’s portal for making a claimed opened on Monday 20 April

 

National Living Wages/National Minimum Wage/Apprentices Minimum Wage

Individuals are only entitled to the National Living Wage or National Minimum wage for the hours they are working or treated as working. Furloughed workers can be paid the lower of 80% of their salary or £2500 even if, based on their usual working hours, this would be below their appropriate minimum wage.

Minimum wage continues to apply if someone who is furloughed has to undertake training for their employer and the employer must ensure minimum wage is paid for 100% of any training period.

If you have any further queries on this please do not hesitate to contact me: steve.ashworth@pkf-francisclark.co.uk.

FEATURING: Steve Ashworth
Before joining the Bristol office of PKF Francis Clark in July 2019, Steve started his career at HMRC over 30 years ago and then spent… read more
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