As the furlough scheme comes to an end, the latest figures have revealed that almost 12 million workers in England, Wales, Northern Ireland and Scotland have been supported by the Coronavirus Job Retention Scheme (CJRS) since its launch last year.Continue reading
Employers have been warned that businesses abusing the furlough scheme will face action from fraud investigators.
Keeping on top of payroll poses a huge challenge for businesses of all shapes and sizes – which is why it is prudent to seek specialist advice and consider the benefits of outsourcing your payroll.Continue reading
The Government is being urged to extend emergency coronavirus support in the upcoming Budget with a recent study warning that businesses face a £50 billion shortfall when the support measures end in April 2021.Continue reading
Small company directors that were not able to claim under the Coronavirus Job Retention Scheme (CJRS) because they paid themselves an annual salary in March 2020 may now be eligible to claim under the scheme.
Many directors missed the cut-off date on 19 March 2020 to be eligible for the first and second iterations of the furlough scheme. However, if those directors paid themselves a salary between 20 March and 30 October 2020, then they can claim furlough pay under the third iteration of the CJRS (November 2020). Issues may arise in how to calculate these claims based on a single annual payment of salary because of the monthly pay cap of £2,500.
HMRC has now published two examples on their website illustrating how furlough claims should be calculated for annually paid directors, with both of these stating that they should be based on “day counts”.
It should also be noted that HMRC views directors as ‘fixed-rate’ employees, even though the pattern of payment may vary. Official guidance states that an individual is classified as a fixed-rate employee if they are ‘entitled under their contract to be paid an annual salary’.
If a director has changed their pay pattern to monthly payments for the 2020/21 tax year then they will be eligible for the CJRS from November 2020, which will be calculated as though the director is a fixed-rate employee.
Official eligibility criteria states that if the director received their annual salary payment in December 2019 then they will be eligible for the CJRS in April 2020, and then again in November 2020.
However, to qualify for the third iteration of the furlough scheme (from November 2020), the April 2020 claim must be paid to the director as salary, which is then reported in a Real Time Information (RTI) return made between 20 March and 30 October 2020.
Crucially, a CJRS claim should not be made until a payroll run is imminent. HMRC gives the example of a director not due to be paid until 30 March 2021 and says that if the employer makes a CJRS claim in an earlier pay period, they will need to pay the director and run payroll earlier than usual.
For help and advice on matters relating to the Coronavirus Job Retention Scheme, please contact our expert team today.
Small company directors that were not able to claim under the Coronavirus Job Retention Scheme (CJRS) because they paid themselves an annual salary in March 2020 may now be eligible to claim under the scheme.Continue reading
The Trades Union Congress (TUC) states that working parents with children, who struggle to balance their work-life and childcare, should be put on the furlough scheme whilst the schools are closed.Continue reading
HM Revenue & Customs (HMRC) penalties for non-compliance by taxpayers have risen by 62 per cent, according to the latest research.Continue reading
Claims under the Coronavirus Job Retention Scheme (CJRS) for November must be submitted no later than 14 December 2020, it has been cautioned.Continue reading
Businesses have just days left to make a claim for staff furloughed in November, with the deadline ending on 14 December 2020.Continue reading