As the Coronavirus Job Retention Scheme online portal is now live, we have produced the below guide to assist employers with making claims for furloughed employees. We have also summarised the government’s guidance with regards to reclaiming statutory sick pay paid to employees as a result of Coronavirus and the interplay between annual leave and furlough leave.
Coronavirus Job Retention Scheme – How to make a claim
Before making a claim via the online portal it is important to take note of the following points:
- Employers will need to make a separate claim for each PAYE scheme;
- The organisation must have a UK bank account;
- A furlough agreement must be entered into between the employee and employer;
- Furloughed employees cannot undertake any work for the employer or any associated business;
- Employees must be furloughed for a minimum period of three weeks;
- You can claim 80% of an employee’s salary, up to a total of £2,500 per month per employee, plus the associated employers National Insurance Contributions (NIC’s) and minimum automatic enrolment employer pension contributions on the reduced salary;
- In order for an employee to be eligible for the Scheme they must have been on the employers PAYE payroll on or before 19th March 2020 and an RTI submission notifying payment in respect of that employee must have been made to HMRC on or before 19th March 2020;
- A claim should be made shortly before or during running payroll because you will need to submit accurate salary figures;
- You must claim for all employees in each period at one time as you cannot make changes to your claim;
- You should receive payment six working days after making an application; and
- If an organisation has more than 100 employees the claim information will need to be submitted in one of the following formats: XLS, XLSX, CSV, ODP.
Before making a claim
Before you submit a claim via the portal, make sure that you have the following information to hand:
- The number of employees being furloughed;
- The dates those employees have been furloughed to and from;
- The name and National Insurance number for each furloughed employee;
- The organisation’s employer PAYE scheme reference number;
- The organisation’s Corporation Tax Unique Taxpayer Reference, Self-Assessment Unique Taxpayer Reference or Company Registration Number as appropriate;
- The organisation’s UK bank account details; and
- The organisation’s registered name and address.
Calculating a claim
Before submitting a claim, you will also need to calculate the following for the relevant claim period:
- The total amount being paid to each furloughed employee (80% of the employee’s wages, up to a maximum of £2,500 a month per employee);
- The total employer NIC’s on the 80% salary;
- The total employer pension contributions (up to 3%).
You should retain your calculations incase HMRC ask you for further information in the future.
If you have decided to top up your employees’ wages by 20% this cannot be reclaimed through the Scheme. In addition, you cannot claim for any additional NIC’s or pension contributions payable where you have agreed to top up employees’ wages. Also, you will not be able to claim for any employer pension contributions that you make in addition to the statutory 3%.
In order to assist you with your calculations you can use the calculator that the government have provided by clicking here
Making a claim
Once you have gathered the information set out above and carried out the necessary calculations you can make a claim via the portal by clicking here
In order to access the portal, you will need a Government Gateway ID and password and an active PAYE enrolment.
Please note that you will need to make a claim in one session as there is currently no option to save and return to your application. Also, sessions will time out after 30 minutes of inactivity.
Once your claim has been submitted the screen will display a claim reference number. You will either need to print the confirmation screen or write down the claim reference number because you will not receive an email confirmation.
Annual Leave and Furlough Leave
Government guidance now confirms that employees can take annual leave whilst they are furloughed. Prior to the updated guidance it was not clear whether a period of annual leave would break furlough, and whether it was competent in terms of the Scheme to allow employees on furlough to take annual leave.
Furloughed employees will be entitled to their usual holiday pay during annual leave and therefore employers will be obliged to top up employees’ salaries for this time over the 80%/£2,500 cap.
Government guidance now also confirms that employees will continue to accrue holiday during furlough leave. In addition, emergency legislation has been passed allowing employees to carry over the four weeks statutory annual leave available under the Working Time Directive to the next two leave years where it was not reasonably practicable to take it in the leave year as a result of the effects of the Coronavirus. This new carry-over rule does not apply to the remaining 1.6 weeks’ statutory leave, however an employer may enter into an agreement with its employees allowing them to carry this leave over in any event.
However, it is unclear whether this new carry over rule will apply where an employee has been furloughed. Hopefully the government will clarify this position shortly.
Statutory Sick Pay
Guidance has been released concerning the Coronavirus Statutory Sick Pay Rebate Scheme. Under this scheme employers can reclaim the current rate of Statutory Sick Pay (SSP) that they pay to current or former employees for periods of sickness starting on or after 13th March 2020.
The reimbursement under the scheme will cover up to two weeks starting from the first day of sickness, if an employee is unable to work because they either:
- Have Coronavirus;
- Cannot work because they are self-isolating at home; or
- Are shielding in line with public health guidance.
Employees do not have to provide a doctor’s fit note for an employer to make a claim under the scheme.
In order to be eligible for reimbursement the organisation must have a PAYE payroll scheme that was created and started on or before 28th February 2020 and the organisation must have fewer than 250 employees on 28th February 2020.
Government guidance states that when making a claim for reimbursement the following records must be kept:
- The reason why an employee could not work;
- Details of each period when an employee could not work, including start and end dates;
- Details of the SSP qualifying days when an employee could not work; and
- National Insurance numbers of all employees who have been paid SSP.
These records must be kept for at least three years following each claim.
The government has produced some helpful guidance on claiming back Statutory Sick Pay.
We are currently offering a new retainer service for employers with regards to the Coronavirus pandemic. Through this retainer we are offering employment related guidance and template documentation for a fixed monthly fee. If you would like to learn more about this service please contact our employment department at firstname.lastname@example.org