The latest guidance from HMRC was finally out last night and their portal opens 8am Monday. There are still some unanswered questions for HMRC, which the accountancy & tax professions are pushing for answers on, but the standard information is clearer now.
There are some fiddly bits, but most of the ‘we don’t know yets’ probably won’t affect most payrolls – but let us know if you have any employees on payroll with no NI number (eg from overseas or under 16yo), or any of zero hours contracts, or any new starters in late Feb/March, these are all trickier.
If we are preparing your claim, for example because we already operate your payroll, we will already have been in touch with you.
These are notes for those employers who are preparing their own grant claims.
You will login through your employer’s Govt Gateway but you’ll need to also be registered for PAYE online and have an ePAYE number. Do this here: https://www.gov.uk/paye-online/enrol
It may be a struggle to get the claim uploaded, paid and into your account by 25th April, if you’re a ‘last Friday’ payday, but hopefully by 30th April, but this all depends on whether the portal is stable to cope with the millions of users!
If you don’t have funds to make the April payrolls, you should put a contingency plan in place. Speak to us if you need further help with this.
You’ll make your first grant claim for March and April together, then one per pay period after that. You can upload your grant claim from 14 days before the payday.
Get all your information ready for the claim – suggest you’ll need a spreadsheet! You’ll have to enter all furloughed employees individually if you have less than 100, you can bulk upload an excel spreadsheet if you have more than 100 employees to claim for.
There is no ‘save and return’ option and you’ll be kicked off after 30 mins of inactivity – so keep doing keystrokes to keep yourself on there, whilst you check information. Try and be as prepared as you can be before you logon. There will be a calculator on the portal if you are stuck but try and work it out yourself on spreadsheet first, as that will be quicker.
- Holiday Pay – you can allow holidays & it doesn’t break furlough (which otherwise needs to be a min of 3 weeks each time); but you have to claim just 80% for the grant amount & then top up to 100% for your payroll; same for bank holidays, if they’re normally taken as leave. Or you can just assume it’s a working-furlough-day, claim the furlough amount & add their extra holiday days onto entitlement for ‘post lockdown’. Your decision probably depends on how much all these accrued holidays are going to cause you a problem later in the year. You need to remember that the holiday top up element is not just basic pay that you might have used to calculate the furlough grant element but should include commission, bonuses etc.
- If you normally claim £4k NI employment allowance (based on your business’ last year’s Class 1 Employers NIC being less than £100k) then you still have to take that in April, and until it’s used up. You will probably need to do some working out of this on a spreadsheet, as the Employers NIC element of your grant must be the lower amount.
- The worked examples on the HMRC handout show how to calculate pro-rata pay and NIC for furlough/non-furlough days –you include all dates in the month, 7 days a week. If you are using average pay because they had uneven pay amounts, check what you can and cannot include (list on handout) and note that you need to average it for the tax year 2019/20 up to the date each employee was furloughed – using number of days from 6th April 2019 until the date they were furloughed (if before 6/4/20). The worked examples in the handout are useful. HMRC HANDOUT
- prepare a reconciliation sheet of your grant claim & eventual payrolls – there may be some adjustments to make such as topping up apprentices to App Min Wage, topping up holiday pay, or pension contributions, for example;
- if there is anything you’re not sure about, make a judgement and note why you considered that to be the correct treatment. Then you can check in the coming days/weeks when things are clearer & adjust either grant claims and/or payrolls next time.
- Make sure you write down the submission number or take a screen shot as HMRC are advising an email confirmation will not be sent!