Furlough, latest guidance

[Mr D]

PS- I also heard it was coming from HMRC directly

I think you are referring to the reimbursement of wages there?

Different from the grant given to businesses registered for business rates.

 

[Pot131]

I think you are referring to the reimbursement of wages there?

Different from the grant given to businesses registered for business rates.

Yes sorry Mr D I mean the reimbursement of wages, does this change things in the scheme of employees waiting? Sounds like they will start paying end of April?

 

[Mr D]

Yes sorry Mr D I mean the reimbursement of wages, does this change things in the scheme of employees waiting? Sounds like they will start paying end of April?

That will hopefully be end of April.
However what if they are delayed? HMRC don't always get things right, could be that most get paid automatically and some need manual payment - just when more staff are off sick or isolating.
So could be May for some.

And what happens later in the year when the taps are turned off? Last payment made - then sink or swim at that point for next wages bill.
Great if your work immediately is at or exceeding work prior to the virus problem. If it takes time to get up to that....? Or doesn't ever go back to that level?

 

[Pot131]

That will hopefully be end of April.
However what if they are delayed? HMRC don't always get things right, could be that most get paid automatically and some need manual payment - just when more staff are off sick or isolating.
So could be May for some.

And what happens later in the year when the taps are turned off? Last payment made - then sink or swim at that point for next wages bill.
Great if your work immediately is at or exceeding work prior to the virus problem. If it takes time to get up to that....? Or doesn't ever go back to that level?

Fair point, but those points are for another day, I’m concentrating on getting through the next few weeks!

 

[Mr D]

Fair point, but those points are for another day, I’m concentrating on getting through the next few weeks!

Factor into planning what risks you can find, work on ways around stuff before it happens.
And endure what cannot be avoided.

 

[Pot131]

Factor into planning what risks you can find, work on ways around stuff before it happens.
And endure what cannot be avoided.

Thanks Mr D, you speak a lot of sense, why do you get so much flak on these forums? I don’t understand it

 

[Dahu371]

We have a weekly paid employee on a zero hours contract who was away for 3 months during the summer working elsewhere. Since September she has been back with us and now on a full time contract.

I'm unsure how to work out how much we can claim back under the CJRS. Do we average her pay over the whole tax year or can we use her average pay since September? The former gives a much lower figure than the latter.

 

[Newchodge]

We have a weekly paid employee on a zero hours contract who was away for 3 months during the summer working elsewhere. Since September she has been back with us and now on a full time contract.

I'm unsure how to work out how much we can claim back under the CJRS. Do we average her pay over the whole tax year or can we use her average pay since September? The former gives a much lower figure than the latter.

Did she appear on your RTI as employed, zero pay, wehnshe was away, or did you give her a P45 and show her as a leaver on an RTI?

 

[Dahu371]

Did she appear on your RTI as employed, zero pay, when she was away, or did you give her a P45 and show her as a leaver on an RTI?

Good point. I'll have to check this out. So if we're showing as continual employment we'll have to include all those zero pay weeks in the average calculation...

 

[Newchodge]

Good point. I'll have to check this out. So if we're showing as continual employment we'll have to include all those zero pay weeks in the average calculation...

That's a good question, to which I don't yet, know the answer. When you cancel average pay for SSP and holiday pay you ignore 0 weeks. The guidance is silent about this. However, if she was shown as a leaver it is simple!

 

[kevin.doran]

As it stands I've included £0 weeks in my calcs, would rather play on the safe side.

@Newchodge - one for you and apologies if i've already missed it but a lot of info to read through now...

Seasonal worker, P45'd early Jan. Started back Mon 24th Feb but works a week in hand so first pay day wasn’t until Fri 6th March.

I'm edging towards them not qualifying but must admit i'm not 100% sure?

 

[Newchodge]

As it stands I've included £0 weeks in my calcs, would rather play on the safe side.

@Newchodge - one for you and apologies if i've already missed it but a lot of info to read through now...

Seasonal worker, P45'd early Jan. Started back Mon 24th Feb but works a week in hand so first pay day wasn’t until Fri 6th March.

I'm edging towards them not qualifying but must admit i'm not 100% sure?

Did they appear on an RTI on or before 28 Feb? I lodge new starters on payroll on the day I am informed they start so, even if they are not due any pay, HMRC is informed they have started.

 

[kevin.doran]

Did they appear on an RTI on or before 28 Feb? I lodge new starters on payroll on the day I am informed they start so, even if they are not due any pay, HMRC is informed they have started.

Client submits his own payroll but I very much doubt it. However, the start date on the submission for payment dated 6th March will show as the week before.

 

[Newchodge]

Client submits his own payroll but I very much doubt it. However, the start date on the submission for payment dated 6th March will show as the week before.

At the moment they are not eligible, although that may change.

 

[JimmyR32]

Hi Everyone, I cannot see that this has been answered explicitly but forgive me if it has. Is the £2,500 cap before or after the 80%?

For example, we have a worker who earns £650 per week (Gross) so would you please be able to confirm if they will receive the 80 percent? So the new Gross would be £520 per week?

 

[Spirconi]

Hi all. I've not been able to find a definitive answer for this anywhere.

I have workers on zero hour that are also registered self employed for other ventures. They are over 50% so will be eligible for the grant. However, its unclear if by taking the furlough it could make them ineligible for the self employed grant?

Is there anything I've missed in gov docs that can clear this up?

 

[Newchodge]

They are eligible for both, until the guidance changes

 

[Spirconi]

Thank you. I will let them know.

I worked out some of them are going to potentially receive £5,000+ as they have several zero hour contracts across the year as well as self employed. Seems very unfair versus people that are struggling to put food on the table and getting nothing.

But as long as they arent doing anything against the rules it's just how it is I guess.

 

[Mr D]

Thank you. I will let them know.

I worked out some of them are going to potentially receive £5,000+ as they have several zero hour contracts across the year as well as self employed. Seems very unfair versus people that are struggling to put food on the table and getting nothing.

But as long as they arent doing anything against the rules it's just how it is I guess.

Its taxable income. And paid in 3 months time for self employed.

 

[Spirconi]

Its taxable income. And paid in 3 months time for self employed.

Yes. I just meant they will get around £2,500+ from furlough via various PAYE sources, and then similar again per month from SE grant in June. All taxable etc of course.

 

[Mr D]

Yes. I just meant they will get around £2,500+ from furlough via various PAYE sources, and then similar again per month from SE grant in June. All taxable etc of course.

Nice to earn so much that £2500 from furlough comes in.

Think majority of the country will be earning less. And some directors and some self employed won't get anything as not meeting criteria.

 

[Spirconi]

Nice to earn so much that £2500 from furlough comes in.

Think majority of the country will be earning less. And some directors and some self employed won't get anything as not meeting criteria.

Exactly my point.

 

[Bob Morgan]

Wasn't Len Furlough once married to Elsie Tanner?

 

[Mister G]

Your staff will be covered by TUPE, so, legally, have been employed by you from whatever the start date of their original employment was. However, the job retention scheme is only available to those employers who had set up and run payroll by 28 February. So, unfortunately you cannot claim on the job retention scheme.

You can only lay off staff on the minimum guarantee pay, which is a pittance and amounts to a total of £145 over 3 months, if their employment contract states that you can do this. If you do the staff can claim redundancy, from you, after 4 weeks' layoff.

If there is no layoff clause you are required to pay your staff normally or dismiss them by reason of redundancy, giving notice and redundancy payments in line with their total length of employment.

I am sorry, I realise this is very bad news for you.

Thanks for your input, we'll have to keep our fingers crossed that Hmrc will help us, as paying redundancy would cost more then paying their wages. some staff have been at the business for 9 years.

 

[Newchodge]

Thanks for your input, we'll have to keep our fingers crossed that Hmrc will help us, as paying redundancy would cost more then paying their wages. some staff have been at the business for 9 years.

There has been a suggestion from an MP today that TUPE'd staff will be covered, but there is no detail yet and it might not be true.

It is not even clear if they can be fruloughed by the old or the new employer.

 

[Mister G]

The

P45's are irrelevant - they were issued because the staff are no longer on the old employer's payroll. It is an administrative action and does not affect the employees' status.

The current rule is that the employer has to have set up and run payroll by 28 February, which you have not. It sounds as if HMRC is thinking about this issue, which is one I have raised with them in anothr forum, however I do not like to give advice on the basis of what might happen - currently you, as an employer, are not eligible.

Holiday pay entitlement is a matter of law and contract, and you are responsible. Furlough is a brand new concept that is currently only covered by guidance and is being developed all the time.

thanks for your input

 

[UKSBD]

There has been a suggestion from an MP today that TUPE'd staff will be covered, but there is no detail yet and it might not be true.

It is not even clear if they can be fruloughed by the old or the new employer.

A bit more on here now https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

"A new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 28th February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership."

@Mister G If you took over on 9th March you might be OK

 

[davey85]

If you get put on furlough for three weeks and given 2 weeks notice at the same time will you be entitled to 2 weeks notice pay after the furlough period? Or will the furlough period effectively be the notice period?

 

[Newchodge]

If you get put on furlough for three weeks and given 2 weeks notice at the same time will you be entitled to 2 weeks notice pay after the furlough period? Or will the furlough period effectively be the notice period?

It would be fairly pointless as notice pay has to be @ 100%

 

[SHARPYWAN]

My staff (25 of them) are paid weekly. We closed and furloughed from 16th March. I continued to pay the staff around 50% of their regular wage, as that is all i could affored.
So i assume i claim for 80% of their average wages from previous year (March 2019 to Feb 2020), then i pay them the difference between what i claimed and what i've already paid them for the furloughed period.
Example
i've paid £3,000 from 16th March to 31st March
Claim works out to be £6,000 for that period
So i pay employees £3,000 and the remaining £3,000 stays in the business to replace what we've already paid.

Does that sound correct?
Thanks

 

[valakot]

Sorry if I missed it somewhere in the thread but my question is:
Can we claim only for the period when employee was furloughed in the past, or we can also claim for the period in the future?
I mean, employee was furloughed from 21st of March, I anticipate that he will be furloughed till 1st of July, If I make a claim now lets say on 1st of May when portal opens, can I claim for the whole period i.e. from 21st March - 1st July, or should I make a separate claims for each month? Like for example I make a first claim from 21st March - 30th of April, than make another claim from 1st May - 31st May, than another one.
I still don't understand do we make a claim for the whole period of furloughing (i.e. 4 months) or for each month of furloughing separately?
The guidance says:
"You can only claim for periods when your employee was on furlough."
"You cannot make more than one claim during a claim period - you should make your claim shortly before or during running payroll."
"You can make your claim in anticipation of an imminent payroll run, at the point you run your payroll or after you have run your payroll."

But this doesn't explain in plain english can we claim for the period that covers future month, meaning May and July when our employee will still be furloughed during that months?

 

[Newchodge]

My staff (25 of them) are paid weekly. We closed and furloughed from 16th March. I continued to pay the staff around 50% of their regular wage, as that is all i could affored.
So i assume i claim for 80% of their average wages from previous year (March 2019 to Feb 2020), then i pay them the difference between what i claimed and what i've already paid them for the furloughed period.
Example
i've paid £3,000 from 16th March to 31st March
Claim works out to be £6,000 for that period
So i pay employees £3,000 and the remaining £3,000 stays in the business to replace what we've already paid.

Does that sound correct?
Thanks

More or less correct. If their pay varies week to week you calculate the average weekly pay from 6 April to the last payday before 16 March (ie do not include any pay period during which they were furloughed.

There is, however, a potential hitch. This paragraph is in the Direction from the Treasury to HMRC, which is the piece of paper that permits HMRC to pay money out.

https://assets.publishing.service.g...4/200414_CJRS_DIRECTION_-_33_FINAL_Signed.pdf

7.12. This paragraph applies where-

(a) in the period beginning on 1 March 2020 and ending on the third day after the making this direction an amount by way of wages or salary is paid in respect of a period of employment (“the original payment”) to an employee,

(b) the original payment is less than the amount required by paragraph 7.1(b)(ii) for the purpose of claiming CJRS,

(c)before making a CJRS claim in respect of the original payment the employer pays the employee afurtheramount (“the further amount”) in respect of the period of employment to which the original payment relates,

and

(d) the sum of the original payment and the further amount meets the requirements of paragraph 7.1(b)(ii).

I think this may mean that if you paid your employees nothing there is no problem, but if you paid them less than 80% you have to have paid it before you can claim it.

I really hope it doesn't mean that as it is moving the goalposts after all the guidance (this was issued on 15 April) and there will be many in your situation who could not and still cannot afford to pay the whole amount. I think the problem may arise because HMRC will look at RTI - payroll returns and compare what was paid with what is being claimed. I expect that to be automated.

I have asked in several places where people understand these things better than me, but got no answer yet.

If anyone else can read and understand that, I would be very interested in opinions.

 

[Newchodge]

Sorry if I missed it somewhere in the thread but my question is:
Can we claim only for the period when employee was furloughed in the past, or we can also claim for the period in the future?
I mean, employee was furloughed from 21st of March, I anticipate that he will be furloughed till 1st of July, If I make a claim now lets say on 1st of May when portal opens, can I claim for the whole period i.e. from 21st March - 1st July, or should I make a separate claims for each month? Like for example I make a first claim from 21st March - 30th of April, than make another claim from 1st May - 31st May, than another one.
I still don't understand do we make a claim for the whole period of furloughing (i.e. 4 months) or for each month of furloughing separately?
The guidance says:
"You can only claim for periods when your employee was on furlough."
"You cannot make more than one claim during a claim period - you should make your claim shortly before or during running payroll."
"You can make your claim in anticipation of an imminent payroll run, at the point you run your payroll or after you have run your payroll."

But this doesn't explain in plain english can we claim for the period that covers future month, meaning May and July when our employee will still be furloughed during that months?

It won't be clear until the portal opens but I don't think you can claim to 1 July. There is reference to making the claim just before (up to 2 weeks, I have seen somewhere) or during running payroll. I think you will have to make individual claims for each payroll period.

 

[Newchodge]

It won't be clear until the portal opens but I don't think you can claim to 1 July. There is reference to making the claim just before (up to 2 weeks, I have seen somewhere) or during running payroll. I think you will have to make individual claims for each payroll period.

There is now more guidance and it looks as if you can make 1 claim covering all past pay periods and the upcoming one.

 

[Newchodge]

More or less correct. If their pay varies week to week you calculate the average weekly pay from 6 April to the last payday before 16 March (ie do not include any pay period during which they were furloughed.

There is, however, a potential hitch. This paragraph is in the Direction from the Treasury to HMRC, which is the piece of paper that permits HMRC to pay money out.

https://assets.publishing.service.g...4/200414_CJRS_DIRECTION_-_33_FINAL_Signed.pdf

7.12. This paragraph applies where-

(a) in the period beginning on 1 March 2020 and ending on the third day after the making this direction an amount by way of wages or salary is paid in respect of a period of employment (“the original payment”) to an employee,

(b) the original payment is less than the amount required by paragraph 7.1(b)(ii) for the purpose of claiming CJRS,

(c)before making a CJRS claim in respect of the original payment the employer pays the employee afurtheramount (“the further amount”) in respect of the period of employment to which the original payment relates,

and

(d) the sum of the original payment and the further amount meets the requirements of paragraph 7.1(b)(ii).

I think this may mean that if you paid your employees nothing there is no problem, but if you paid them less than 80% you have to have paid it before you can claim it.

I really hope it doesn't mean that as it is moving the goalposts after all the guidance (this was issued on 15 April) and there will be many in your situation who could not and still cannot afford to pay the whole amount. I think the problem may arise because HMRC will look at RTI - payroll returns and compare what was paid with what is being claimed. I expect that to be automated.

I have asked in several places where people understand these things better than me, but got no answer yet.

If anyone else can read and understand that, I would be very interested in opinions.

Following this, OP what did you put on your payroll submissions?

 

[ADW]

There is now more guidance and it looks as if you can make 1 claim covering all past pay periods and the upcoming one.

When you say the upcoming period are you talking the coming month as well as previous or the whole period until end of furlough i.e. end of June?

I did read through the above paragraphs you posted but it hurt my head so of no help sorry. I am sure the person who wrote it will probably not know exactly what it means on reading it back. Really don't understand why legal jargon is written in such a complicated way when it is critical guidance that needs to be clearly interpreted.

 

[Newchodge]

When you say the upcoming period are you talking the coming month as well as previous or the whole period until end of furlough i.e. end of June?

I did read through the above paragraphs you posted but it hurt my head so of no help sorry. I am sure the person who wrote it will probably not know exactly what it means on reading it back. Really don't understand why legal jargon is written in such a complicated way when it is critical guidance that needs to be clearly interpreted.

Upcoming pay period. Or the payroll you are about to run, so probably April. Not the one after that.

 

[recruiter_25]

Hi, does anyone know if commission for recuitment consultants can be used in the averge calcuation or will the 80% be based on their basic?

 

[Newchodge]

Hi, does anyone know if commission for recuitment consultants can be used in the averge calcuation or will the 80% be based on their basic?

The Direction referenced above in post 272 above states that the amount cannot include anything that varies in relation to :

(a) the performance of or any part of any business of the employer or any business of a person connected with the employer,
(b) the contribution made by the employee to the performance of, or any part of any business,
(c) the performance by the employee of any duties of the employment, and
(d) any similar considerationsor otherwise payable at the discretion of the employeror any other person(such as a gratuity).

 

[UKSBD]

I think this may mean that if you paid your employees nothing there is no problem, but if you paid them less than 80% you have to have paid it before you can claim it.

I would say that depends on whether the 50% payment was recorded on the payroll or whether the full amount was but only some of it was actually paid out (effectively the employee was lending the company the money)

If the 50% was put through the payroll, it may be seen that the employee and the employer agreed that they would be only paid 50% therefore meaning they were not on Furlough