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Coronavirus Job Retention Scheme & how to implement it into your payroll run
New information relating to the Coronavirus Job Retention Scheme (CJRS) has been added to various guides created by HMRC. This has been an evolving Scheme and some uncertainty remains, but crucially for business the government on-line portal for making claims opened on 20 April. As payroll providers and employers alike have been scrambling for the latest information the update to the guidelines may prove very helpful for some of the uncertainties surrounding the coronavirus job retention scheme and how to process it.

Non-discretionary payments and non-discretionary overtime payments
Employers can claim for any regular payments that are usually paid through payroll, they are obliged to pay their employees which includes wages, non-discretionary overtime, non-discretionary fees and compulsory commission payments. Discretionary bonus (including tips), commission payments, non-cash payments, non-monetary benefits, and money that was not officially processed through payroll should be excluded. You can take help of payroll firms UK to make it more clear for you.

When establishing if a payment is non-discretionary, only payments which employers have a contractual obligation to pay should be included. If variable payments are included within a contract, and those payments are made regularly, these payments could become classed as being non-discretionary. Those payments should also be included when calculating 80% of employee wages.

Claim periods
Further information has been issued on what periods a claim should cover, and how far in advance claims can be made.

Claimants should decide the length of the claim period, and should consider how often they process/run their payroll, e.g. weekly/ monthly/ two-weekly etc. Different claimants will operate different payroll frequencies.

Claimants should not make more than one claim during a claim period – this will mean that they should include all employees they want to furlough for the claim period as they will not be able to submit another claim for the same period or one that overlaps. Claim periods should follow on from one another where employees are continuously furloughed, with no gaps in between.

Claims may be made prior to an imminent payroll run, at the point at which payroll is run or after the payroll has been run. Claim periods can be backdated from 1 March 2020 but only if employees have been furloughed from that date – the claim period must not start prior to the date that the first employee was furloughed, and grants may only be claimed for employees for the time they were furloughed.

The claim end date must be no more than 14 days in the future from the date the claim is made, and any claim period must contain all the furloughed days that the claim amount relates to.

Record keeping
There is clarification that records must be kept for a minimum of six years, including the amount claimed and claim period for each employee, the claim reference number and any calculations, in case HMRC requires further information relating to any claims.

 Missing National Insurance numbers
There is also confirmation that claimants can search for an employee’s National Insurance (NI) number if they do not have it, but alternatively they should contact HMRC if the employee does not have an NI number.

Extension to the Coronavirus Job Retention Scheme

Both the employee and the employer guidance has been updated and now states that the CJRS would be extended until the end of October 2020. The scheme will continue to pay grants of 80% of employee pay up to a cap of £2,500 per month until the end of July 2020, but from August 2020, there will be more flexibility and employers will be able to bring their workers back to work on a part-time basis. We await further guidance on this which should be available by the end of May 2020 and how exactly this will effect the claim process and payroll processing.

Furloughed employees and other work
There is also additional information relating to where employees carry out volunteer work which confirms that employees are allowed to take part in volunteer work. They can also undertake training but if they undertake training for the business that has furloughed them they must be being paid the minimum wage (through furlough). Furloughed employees can also carry on working in their second job if they already have one and if their employment contract permits it they can start another job as long as they are available for their original employer who furloughed them when things go back to normal.

As long as it does not provide services to, or generate revenue for, or on behalf, of the business they are being furloughed in, or any associated organisation. Employers must not furlough employees and then request them to volunteer for them in the same or a different role.

Holiday Entitlement

  • The Guidance now makes clear that holiday continues to accrue during furlough, and employees can take leave whilst on furlough.
  • The Guidance says that holiday pay should be “at your normal rate of pay” calculated in accordance with the Working Time Regulations 1998 (the WTR). Employers are obliged to top up the Scheme payments to usual pay.
  • What amounts to “normal rate of pay” may vary depending on whether permanent contractual pay reductions have been agreed, or whether the pay variation is only for the duration of the Scheme.
  • The government has also amended the WTR to allow the carry-over of up to four weeks’ (rather than the full 5.6 weeks) statutory leave for the next two leave years, where it is not reasonably practicable for employees to take some or all of their holiday entitlement due to coronavirus.

Sickness & SSP

  • The Guidance states that if an employee is on sick leave or self-isolating as a result of Coronavirus, they will be able to get SSP, subject to the usual eligibility requirements. Further changes to the SSP regime on 16 April have brought those who are shielding within SSP provisions.
  • The Guidance also states that short term illness/self-isolation should not be a consideration in deciding whether to furlough. If, however, employers want to furlough employees for business reasons and they are currently off sick, they can still furlough them. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee.
  • The Guidance states that employees on long term sick leave or who are shielding can also be furloughed. It is for the employer to decide.
  • The Guidance states that it is up to employers to decide whether to move employees who have been furloughed and become sick onto SSP, or keep them on furlough at their furloughed rate.

How Payroll Bureau can support you
Payroll Bureau has the experts ready to make coronavirus job retention scheme on your behalf and take over all furloughing duties. Payroll Bureau also has set up a fast-track payroll service to make transitioning to using us as your providers easy, guaranteeing a simple on boarding experience to support compliance in as little as four weeks.