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Payroll News

Coronavirus Job Retention Scheme: Q&A

21 April 2020

We recently ran a webinar covering the Coronavirus Job Retention Scheme and had a variety of questions asked from participants. We have pulled together a Q&A document below coving all of the questions. Please click on the links below to listen to the recording and download the slides.

Coronavirus Job Retention Scheme Webinar Recording 

Coronavirus Job Retention Scheme Presentation Slides

Q. Where an employee is furloughed part way through a pay period, the pro-rating calculations for the reclaim will be quite fiddly then - need to pro-rate the furloughed salary, the NIC calculation and the pension calculation.  Are JC Payroll able to review our calculations before we submit a claim?

A. No this will not be possible due to resource. We have provided clients with simply spreadsheet that will work out the claimable items once the furlough pay is inserted.

Q. We have a furloughed employee who is paid a salary based on 30 hours per week and she invariably does more hours for which she is paid overtime. Do we claim for an average of the overtime hours she has worked in recent months (over what period?).

A. If the overtime is an expected part of her normal income then you should work out her reference pay using the variable pay average pay method as detailed in the presentation and the Government guidance.

Q. Mention is made for 3 weeks; we all do monthly payrolls do we claim a month?

A. We do not know yet. Once details are released we will advise clients.

Q. Can we confirm that we need to make physical furlough payment before making the claim on the portal?

A. The guidance states that the claim should be made just before or during the payroll process.

Q. Is the annual £3k (£4k?) NI reduction for small payments impacted by Furloughed employees or still in addition?   

A. Possibly although nothing has been confirmed. The safe option is to claim later in the year once any impact is known.

Q. We have students that just work holidays but aren't working this Easter due to COVID19.  Are they eligible for furlough?

A. If they were paid on the February payroll then yes.

Q. Is there anything that can be done for employyes starting after 28 February?

A. Not under this scheme. I believe they would need to revert to the Universal Credit option.

Q. I intend to furlough 12 staff from the end march, I want to pay 20% and claim 80% back from the furlough grant - what information do I need to give JC payroll? 

A. You need to provide us the information as detailed in my mailings to clients. Essentially you need to tell us what you want to do i.e. furlough from a date in March, who is involved and their furlough pay rates. You need to work these rates out and examples were provided in my mailings to bureau clients.

Q. What more exactly are the boundaries regarding what a salaried director can, and cannot do, in practical terms as an officer of the company?

A. Furloughed Directors can perform the tasks as set out in the Companies Act 2006.

Q. If James Cowper Kreston run a company's payroll will the company already be registered online?

A. Not by default as bureaus use an agents channel to connect with HMRC. If you do not have Government gateway login details then it’s a fair bet you will not be registered.

Q. Have I disqualified myself from furlough by listening to this webinar?

A. No, I would consider attending this webinar at training.

Q. Bank Holiday pay for Furloughed staff will need to be at Full pay?  

A. No.

Q. I presume we will have to adjust the EER Ni claimed and Pension claimed due to the higher rate of pay for the Bank Holiday?

A. N/A

Q. Do they accrue holiday for bank holidays while on furlough?

A. This is an employment law question, but I believe so as employment law remains.

Q. How do you treat holiday and holiday pay while somebody is being furlough?

A. Whilst on furlough the employee is not working so holiday pay is not an issue.

Q. What are the minimum communication/records required to staff furloughed and in what form? eg letter or email, revised contract of employment?  

A. More will be known when the portal opens but all documentation that lead to and recorded an employers actions during any claim period, including selection process and contract changes.

Q. Do we need to notify JC Payroll if we still plan to pay furloughed staff their full salaries, hence no changes to payroll are required i.e. we plan to top-up the 20% gap?

A. Not really, as the claim is separate to payroll.

Q. If James Cowper Kreston do our payroll they are presumably registered for the PAYE online, is our online PAYE registration a separate issue?

A. Yes as bureaus use an agents channel to connect with HMRC. If you do not have Government gateway login details then it’s a fair bet you will not be registered.

Q. Can an employee be furloughed for 3 weeks then employed for another week then furloughed again for 3 weeks etc. For example - Finance team /month end running payroll.

A. Yes but keep detailed records for your claim which will be messy.

Q. I have an employee on minimum wage in February. Can I claim 80% of this or should I pay the new April minimum wage?

A. Furlough pay is based upon February pay.

Q. So for employees who got a pay rise in March, which some did, we can only claim for 80% of the February payroll, is that correct?

A. This is technically correct.

Q. Are furloughed staff able to work for other employers while they are furloughed?

A. Yes

Q. What info about furloughed staff do we need to tell JC Payroll and by when in the month?

A. You need to tell us what you want to change in the payroll by your usual deadline date.

Q. If we are going to top-up all salaries do we need to say anything to JC Payroll?

A. No, not really as the claim process is separate.

Q. If an employee joined the company too late to be furloughed under the scheme but we can't allow them to work is there anything we can do?

A. Nothing that I am aware of.

Q. Can employees be brought back from furlough for a single day after 3 weeks, and then re-furloughed the following day for another 3 weeks?

A. There is nothing to say they cannot but the claim process would be messy I would suggest.

Q. How are holidays treated and in particular bank holidays?

A. Staff are not working during a period of furlough so holiday is not a consideration.

Q. I work for a school MAT. We employ our own kitchen staff who provide meals that are almost entirely paid for by parents and staff. I.e. we do not receive public funding for most of this cost. Can we apply for the grant?

A. If they are paid on a PAYE scheme I would suggest yes.

Q. If an individual has >1 role in a business and therefore >1 contract can you furlough 1 contract only?

A. I do not think so. The guidance states an employee can be furloughed from one job even if they have multiple jobs, but do not think this means with the same employer.

Q. Do you have any guidance as to what amounts to a business being severely impacted?

A. The scheme is self service so you need to make that judgement. If your alternative to using the scheme was to make the employee redundant then clearly you have been impacted. I would also say have financial issues paying pay. But this is for you to decide.

Q. How long after claiming will HMRC pay the grant?

A. We do not know at this time.

Q. Are the revenue expecting employers to make several claims, as opposed to just one?

A. Yes, claims can be made every three weeks.

Q. How can we check that we are on ePAYE?  We currently file through Xero so thought this all was in place.

A. If you do not have Government gateway login details then it’s a fair bet you will not be registered. You could try the HMRC on-line helpdesk on 0300 200 3600

Q. If you have staff doing regular but varied overtime each month. Am I correct in saying I take 80% of their TOTAL basic & overtime hours for feb 2020.

A. You can choose to use either the fixed salary method or variable pay method if overtime is a normal expected part of their pay.

Q. If there is no salary sacrifice deduction and you only pay employer contributions, this will mean you will be paying less than AE minimum total contributions - will that be allowed?

A. As I mentioned on the webinar we have not been given any definitive answer. Employers need to make the call and if they need to adjust in the future they will need to.

Q. Are there any caveats in the event that the employee were not be able to re-engaged after the furlough?

A. No, whilst the scheme is open you can furlough staff. When the scheme is over you may still need to consider the employees future.

Q. If we are claiming based on average pay, over what period is the average worked out?

A. This is detailed in my webinar slides and the HMRC guidance provided in our updates.

Q. I have someone returning from maternity leave this month who I intend to furlough - do I do it at a new pay rate or average of her earnings pre maternity leave?

A. I believe it will be the pre maternity leave rate.

Q. If you are funded by the state e.g. academy can we not furlong our staff as we are still receiving funding for them?

A. Correct

Q. We have staff on two contracts, one relates to public funding and one relates to trading income. Are we able to furlough for the trading income element? 

A. I do not think so. The guidance states an employee can be furloughed from one job even if they have multiple jobs, but do not think this means with the same employer.

Q. What is the position with regard to holidays booked during the lockdown period? Are staff entitled to cancel and defer?

A. This is a legal question which I am unable to answer.

Q. Conversations and written letters were given to employees who were furloughed on Letterhead etc. However, I have not made a formal amendment to existing employment contracts.  Do I need to?

A. This is a legal question which I am unable to answer.

Q. If employees take on additional work whilst on furlough, do they have to tell us about it?

A. Not that I am aware of. There is nothing in the scheme notes suggesting they do.

Q. You have indicated the portal will open 20th April; do you have any indication of when grants might first be received after submitting the first claim?

A. No

Q. Self-employed (aka sole director companies) do we have to provide 3 years accounts/PAYE records as they are typically not 'salaried'? I assume I can only claim typical wages over that period not dividends?   

A. The scheme does not cover the self-employed. Our practical advice doucment has self-employed help reference materials.

Q. Will James Cowper Kreston be arranging a webinar for the Self Employment Part?

A. We have planned a number of webinars and we will be sending out invites in due course. 

Q. Would submitting a VAT return qualify as statutory duty?

A. I believe is does.

Q. Can a employee working during notice period be place on furlough?

A. No

Q. For historical reasons our payroll is managed by our local authority so, although we have an HMRC payroll reference number, we don’t have an online account. Can we still register?

A. Yes

Q. What is the recommended response if someone doesn’t agree to being placed on furlough leave?

A. This is a legal question which I am unable to answer.

Q. What is the response to someone that isn’t being furloughed but feels discriminated and wants to be placed into the scheme?

A. This is a legal question which I am unable to answer.

Q. Is it possible to furlough half ones employed staff on the job retention scheme (e.g. for 3 weeks), take them back for 3 weeks (when the other half are furloughed), and so on…?

A. Technically yes but I would suggest the claim process would be messy.

Q. In the calculations you shared previously as part of the practical advice document, for employees earning below the threshold (example 1, page 6), salary was compensated at 80% but employers NIC looked as it was at at 100%, which I found confusing. So the question is whether you can only expect the NI reimbursed at the 80% rather than 100% as shown in your example?

A. This was a pre-webinar question which I hopefully answered. Essentially you can recover 100% of the ER NIC on the furlough pay rate used.

Q. If a person is furloughed can they also claim their commission (say an estate agent) where commission is referred to in their contract?

A. This is a legal question which I am unable to answer.

Q. We furloughed our staff on the 1st April, as this is a 3 month grant could we claim April – May and June, or just April and May?

A. Currently, April and May

Q. With regard to the hardship of employees employed in March 2020 that do not qualify as furloughed has the Government indicated whether there may be some help for them?

A. I believe they will need to revert to the Universal Credit options

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