Question: Some of our clients have new employees who started on 1 March 2020. The clients operate monthly payroll and process the payroll towards the end of the month so that is when any new starters get notified to HMRC through the RTI submission. Will those employee who started on 1 March 2020 but were processed at end of March be eligible for furlough?
Also do claims have to be made for each month separately after the payroll has been processed?
Unfortunately it seems that the RTI submission needs to have been done by 19 March, that is the extended cut off date. So not as many will benefit from the extension as was first thought, just a few who are paid weekly paid or where payroll was run before the cut-off date.
Where someone joins after 28 February who is monthly paid they would not benefit unless RTI was done before 19 March cut-off date (which we can see is probably most unlikely)
Please rememver that you can make furlough claims in advance of the pay date so if an employee is furloughed through to 30 April for instance.
Question: When we put the claims in for March can we claim for April salary to be paid 30 April?
Yes if the employee has been furloughed for the period up to 30 April. It will depend on the furlough period agreed in the employee’s furlough letter.
Question: What about overtime and commission? There seems to be some division of opinion.
Employers can claim for any regular payments they are obliged to pay employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded. That is the answer to this question based on HMRC guidance.
So to give an example if full-time employee is on £20,000 a year and received £2,000 on say 24 December 2019 (past overtime or 10% Christmas bonus) then the regular pay for furlough would be £22,000.
Question: For employer pension contributions – is it correct that the government will only pay for payments on qualifying earnings only? So if company pays pension on ALL earnings they will only get a part rebate from government?
The pension reimbursement is the statutory 3% up to the 80% furlough amount or £2500 if lower.
Question: If the employers NIC is covered by the employment allowance could this amount still be claimed?
Moneysoft’s Payroll manager seems to deduct it so we can assume that this has been confirmed with HMRC. The latest HMRC guidance suggests that the EA should be deducted in calculating the CJRS grant claim, see guidance below.
Work out how much you can claim for employer National Insurance contributions
You can claim reimbursement for the cost of some or all of the Class 1 employer National Insurance contributions paid on the gross pay grant you pay to the employee.
You can choose to provide top-up salary in addition to the grant. Employer National Insurance contributions on any additional top-up salary will not be funded through this scheme.
Working out what you can claim
The total grant for employer National Insurance contributions cannot exceed the total amount of employer National Insurance contributions you are due to pay.
In calculating the total employer National Insurance contributions paid in any pay period, the employer should subtract any Employment Allowance used in that pay period. If you have not, or do not expect to pay any employer National Insurance contributions in a pay period as a result of the Employment Allowance, you should not claim any employer National Insurance contributions costs for furloughed employees in that pay period. If you expect to exhaust any Employment Allowance in a pay period then you should claim the lower of the employer National Insurance contributions grant calculation, and the employer National Insurance contributions costs that you paid, or expect to pay across your entire payroll.
The total employer National Insurance contributions due in a pay period should be apportioned on a daily basis, with the amount apportioned to any qualifying furlough days forming the basis of the amount that can be claimed through the scheme.
If you require assistance with any element of the CJRS and making a claim for furloughed employees please contact us on firstname.lastname@example.org