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I took on 3 full time staff part way through Oct 2020 can i Furlough them at their agreed salary?

Discussion in 'General Business Forum' started by Rapid Eye, Jan 12, 2021.

  1. Rapid Eye

    Rapid Eye UKBF Newcomer Free Member

    14 0
    I have 3 cafe staff who were working 45hrs 45hrs 60hrs/week between June and September 2020 and decided to put them all on PAYE during October. Due to having told to close by the Gov temporarily because of Covid i asked my bookkeeper to furlough all three staff from 20 Dec to 11 Jan as all of our booking had been cancelled and we were know finding it completely impossible to enjoy our work and make any money!
    My problem is that their October paye live post was only made up of half of the month as they were paid on a freelance rate up until the paye paper work was complete. Since their Furlough pay is referenced to their October pay slip can we claim for their contracted hours or can we only refer to what has been posted during October which is far less than was their agreed salaries?
     
    Last edited: Jan 12, 2021
    Posted: Jan 12, 2021 By: Rapid Eye Member since: Jan 12, 2021
    #1
  2. Newchodge

    Newchodge UKBF Big Shot Free Member

    14,906 4,021
    How can cafe staff ever be freelance?

    Because of your scam you can only claim what you told HMRC they were paid, not the reality.
     
    Posted: Jan 12, 2021 By: Newchodge Member since: Nov 8, 2012
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  3. Rapid Eye

    Rapid Eye UKBF Newcomer Free Member

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    Hi Cyndy Under the circumstances at the time most employers were scared to enter PAYE contracts and would rather use freelancers or agencies. I found good people and as things seemed to be ok during the summer and put them on PAYE. Sorry if you think this was a scam.
     
    Posted: Jan 12, 2021 By: Rapid Eye Member since: Jan 12, 2021
    #3
  4. Newchodge

    Newchodge UKBF Big Shot Free Member

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    You cheated HMRC out of NI contributions and, possibly icome tax. You cheated your employees out of NI contributions and pension contributions, and, probably holiday and sick pay entitlement. Because of your illegal action you have cheated your employees out of the chance to receive full furlough pay.

    The you come on here hoping to be able to cheat HMRC again by claiming furlough for pay you chose not to declare.

    It is not that I think this was a scam, this was a scam and you should be ashamed of yourself.
     
    Posted: Jan 12, 2021 By: Newchodge Member since: Nov 8, 2012
    #4
  5. Rapid Eye

    Rapid Eye UKBF Newcomer Free Member

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    Hi Cyndy
    I don't understand why employing freelance Baristas is wrong. There are plenty of agencies where you can employ cafe staff in London even for half a day. Check out Baristas on Tap.. they are great.
     
    Posted: Jan 12, 2021 By: Rapid Eye Member since: Jan 12, 2021
    #5
  6. Rapid Eye

    Rapid Eye UKBF Newcomer Free Member

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    Back to the point though. If you are contracting paye a member of staff during October 2020, which was the cut off point for Furlough 2, and because of the way the paper work was submitted their contract started halfway through October, are you only allowed to claim furlough for the full contract or only the amount of PAYE that was submitted in real time for that month?
     
    Posted: Jan 12, 2021 By: Rapid Eye Member since: Jan 12, 2021
    #6
  7. Mr D

    Mr D UKBF Legend Free Member

    26,286 3,218
    The agencies - they employ the staff? You would contract with the agency, they deal with the staff?
    Would not you be scamming as Cyndy puts it.

    You don't get to decide whether someone is freelance or employee simply by what is best for your business. You take on employees and don't treat them like employees then they can and do win at employment tribunals..... and in at least one instance the employer had to pay out over a year's salary in holiday pay!

    There are circumstances you can take on freelance staff in a business. Usually for considerably higher cost than employees. Say someone doing cleaning charging you £90 for 6 hours day.
     
    Posted: Jan 12, 2021 By: Mr D Member since: Feb 12, 2017
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  8. Rapid Eye

    Rapid Eye UKBF Newcomer Free Member

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    yes we pay between 13 and 15 pounds per hour.
     
    Posted: Jan 12, 2021 By: Rapid Eye Member since: Jan 12, 2021
    #8
  9. Mr D

    Mr D UKBF Legend Free Member

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    Could be pricey then paying out for furlough but not claiming all that could have done.
     
    Posted: Jan 12, 2021 By: Mr D Member since: Feb 12, 2017
    #9
  10. Rapid Eye

    Rapid Eye UKBF Newcomer Free Member

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    Exactly why we should probably let them go until the restrictions are lifted... otherwise just the salaries is 5.5k and the rent plus rent at 5k plus everything else and we only get a closure grant of 3k a month which has not come through yet
     
    Last edited: Jan 12, 2021
    Posted: Jan 12, 2021 By: Rapid Eye Member since: Jan 12, 2021
    #10
  11. paulears

    paulears UKBF Big Shot Full Member

    4,644 1,250
    You clearly do not understand the freelancing concept, as you seem to think that your 13 to 15 pounds an hour is good - when they get no holiday pay, no pension and no rights or job security, that brings the 13 pounds an hour down quite a lot. Lots of employers figure that they just pay people as freelancers and that is that - but HMRC may well decide you didn't pay the employees National Insurance AND demand the employee's NI too, plus their unpaid tax. They'll want proof these people were genuinely self-employed. Actually a good test is that many self-employed people, which is what a freelancer is, did NOT get the self-employed covid grant. If they didn't;t get the grant, there is a good chance they're not really self-employed, leaving you liable.
     
    Posted: Jan 12, 2021 By: paulears Member since: Jan 7, 2015
    #11
  12. Rapid Eye

    Rapid Eye UKBF Newcomer Free Member

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    Ok well you have all helped me make up my mind to let them go until business is unlocked and release me from the burden..cheers lee thanks for the help
     
    Posted: Jan 12, 2021 By: Rapid Eye Member since: Jan 12, 2021
    #12
  13. paulears

    paulears UKBF Big Shot Full Member

    4,644 1,250
    You know sometimes, you can understand why bosses get a bad name.
     
    Posted: Jan 12, 2021 By: paulears Member since: Jan 7, 2015
    #13
  14. simon field

    simon field UKBF Legend Full Member - Verified Business

    5,143 1,938
    Nobody here is called Lee.
     
    Posted: Jan 12, 2021 By: simon field Member since: Feb 4, 2011
    #14
  15. Rapid Eye

    Rapid Eye UKBF Newcomer Free Member

    14 0
    I employ 19 Staff. The cafe was a new venture and part of an existing business I have had for 29 years.. I have employees that I employed from then.. I have great relationships with all of my staff. This working climate with its restrictions is putting a lot of pressure on small businesses. I was asking for help about 1 issue. Your critical approach, finding faults rather than being creative and helpful leaves me feeling bored.
     
    Posted: Jan 12, 2021 By: Rapid Eye Member since: Jan 12, 2021
    #15
  16. STDFR33

    STDFR33 UKBF Big Shot Free Member

    4,574 1,224
    ‘Creative and helpful’

    Screw the taxpayer some more.
     
    Posted: Jan 12, 2021 By: STDFR33 Member since: Aug 7, 2016
    #16
  17. Rapid Eye

    Rapid Eye UKBF Newcomer Free Member

    14 0
    Oh dear that’s enough from me thanks
     
    Posted: Jan 12, 2021 By: Rapid Eye Member since: Jan 12, 2021
    #17
  18. Alan

    Alan UKBF Legend Full Member - Verified Business

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    So were they actually agency staff, that 'resigned' from the agency to join your business as employees? I'm confused.

    If they were employed by you mid October and PAYE on RTI October - then you would use their salary or average pay (if variable hours) - the half a month is irrelevant as their slaray is salary or if weekly variable the average pay is the
    2 weeks divided by two.

    ( the prior employment by the agency, or indeed if they actually were 'self employed' is irrelevant }

    But shouldn't your accountant be working this out?
     
    Posted: Jan 12, 2021 By: Alan Member since: Aug 16, 2011
    #18
  19. Mr D

    Mr D UKBF Legend Free Member

    26,286 3,218
    I think it was the trying to scam bit that put some people off. To be honest it's expected that new business owners will be unaware of the complexities of employment. Experienced business owners usually know.
     
    Posted: Jan 12, 2021 By: Mr D Member since: Feb 12, 2017
    #19
  20. Rapid Eye

    Rapid Eye UKBF Newcomer Free Member

    14 0
    Hi Alan
    Thankyou for that post.. correct I had employed them previously and then I took them on paye on RTI during October.. my bookkeeper thinks that he can only claim for the 2 weeks that they worked during October, using this figure as a monthly total? He said to me this morning if I could find out differently then he could change the furlough application.. I am hoping that I can apply their monthly contractable rate to the furlough scheme irrelevant of the payment made in October? Cheers
     
    Posted: Jan 12, 2021 By: Rapid Eye Member since: Jan 12, 2021
    #20