As part of the Government's response to COVID-19, HMRC have created the 'Coronavirus Job Retention Scheme' (CJRS). You can apply for a grant via this online scheme if you cannot maintain your current workforce because your operations have been severely affected by coronavirus. You can furlough employees and the grant will cover 80% of their usual wages, up to a maximum of £2,500 a month, plus the associated employer National Insurance contributions and the minimum automatic enrolment employer pension contributions on that wage (i.e. 3% of qualifying earnings).
The calculation of wages is based on any regular payments you are obliged to pay, including past overtime, fees and compulsory commission payments. Do NOT include discretionary bonus, commission payments and non cash payments.
For more essential reading and further HMRC guidance on furloughing employees and the new job retention scheme please click here.
There are a number of options available in the system that you could use to assist you with furloughing.
- If you wish to keep furloughed employees separate in the payroll you could set up a new location which can act as a separate department to allocate the employees to.
- You can set up a new pay category and call this, for example '80% furlough salary' and pay furlough employees under this pay category.
If you then go into Reports> Pay category report you can select the pay category you have used for your furlough payments, within the download option select the CV-19 job retention scheme. This will then create a partially completed template report that can be used to claim via the online portal.
Report Guidance.
- When completing the date fields e.g claim period start/end and employee furlough start/end you will need to format YYYY-MM-DD e.g 2020-05-01.
- The figures populated in the report are based on the selection of pay category chosen. In the above example a pay category of 80% furloughed salary has been set up in the payroll and some of the employees have been furloughed and paid under this category with no further top up, they also have a qualifying auto enrolment pension.
- 5 employees were paid under the selected category within the pay run.
- Total claim amount is calculated based on pay category + employer pension amount + employer NI amount
- Amount claimed for gross pay is the total amount of pay category selected
- Amount claimed for Ers Nics is the total amount of employer national insurance paid in the pay run
- Amount claimed for Ers AE pension is the total amount of employer pension paid in the pay run
NOTE: If you pay above the maximum reclaimable within the CJRS scheme you will need to amend these figures. If you are claiming the Employment Allowance you need to make sure you are not claiming twice i.e. claiming for employer NI in the CJRS and applying the allowance in the payroll. It is your responsibility to ensure you claim the correct amounts from HMRC.
If you have more than 100 employees you can upload the file once you have completed and checked your figures.
The HMRC online portal is now open and is designed to be self serve with guidance in place, please click here for HMRC's guide to claiming.
The CJRS grant has been extended until the end of April 2021, more detailed guidance around this is yet to be published.