UPDATED NOVEMBER 2020
As of 1 November 2020, the new Coronavirus/COVID 19 Job Retention Scheme (CJRS) applies. This means employers can lodge a claim for 80% of the salary for furloughed workers. This guide is aimed to help people DIY a claim. Please note it is aimed at a typical Maslins client, being a small Ltd Co, with just one or two directors on the payroll. There can be lots of complex/niche scenarios that this page will not cover.
A few key things before you submit a claim:
Must have been furloughed
Furloughed individuals cannot do any commercial work at all for the company whilst furloughed. The government accept that a director merely complying with their statutory duties (eg filing things with Companies House) will be ok. However, it’s clear you shouldn’t have done any income generating activities for your company during the period covered by the claim. The new job retention scheme has more flexibility than the previous version, in that you can now claim for the hours not worked by an employee during a period, rather than it being an all or nothing claim. We would suggest you write minutes of a board meeting where you formally note which individuals have been furloughed, and from when.
Must be enrolled for online PAYE services
You will also need to have an HMRC portal account enrolled for online PAYE services to lodge a claim. If you do not have this, potentially your accountant may be able to lodge a claim on your behalf if they’re registered as your authorised agent for PAYE services. Otherwise, your first step would be to get one of these in place.
You can only make one claim per period
Therefore ensure you do it right first time, and for all eligible staff. You can’t submit it for one staff member for November today, with the intention of submitting again for another staff member also for November later.
Work out your claim amount before accessing the page
Whilst not rocket science for simple small businesses, you will need to calculate how much you’re due. Especially if there are 2+ staff being claimed for, or perhaps staff only furloughed for part of the month, you’ll want to work this out in advance. The claim form doesn’t really help with this, just asks you to enter the claimed amount. As the form times out if left too long, we’d suggest you work out the claim amount before accessing the form.
Remember this supplements, not replaces, your RTI payroll submissions
This form is for the government to reimburse the employer for salaries paid out to employees. Therefore your company’s payroll should still be submitted as normal.
How to Claim
If you’re happy the above applies to your situation, you can lodge your claim from the above link, then finding the big green button 3/4 the way down. The claim form is designed to be as user friendly as possible, but a few things that may help:
Type of employer
For our typical client the business will be a Ltd Co, not a sole trader (or partnership/LLP). Therefore choose the option that the employer submits a company tax return (you as director may well also be registered for self assessment, but this is not due to you being an employer, so not relevant here). Hopefully you know your company’s Unique Taxpayer Reference to then enter. If not, your accountant may have this on their files.
Period of claim
The earliest you can claim from is 1 November 2020. We would suggest you keep things simple and base your claim periods on full calendar months. Eg first claim you might have would be 1 November 2020 – 30 November 2020. If you continue to be unable to work and wish to claim for future periods, you would need to complete separate claims for those shortly after those payrolls have been processed.
All claims must be submitted by the 14th day of the month following the calendar month they apply to. Therefore, claims for periods in November must be submitted by 14 December.
Amount of claim
The claim per employee will be for the lower of 80% of their salary in that month and £2,500. Eg if you were on a salary of £791/month, it would be £632.80 for that month, assuming you were unable to work or any of that month. If two individuals were both furloughed for that whole month, and both were on £791/month, then the total claim for the month would be £1,265.60.
If you worked for some of the month, but not all, then you’ll need to claim pro rata. It seems there are a few different methods of calculating this, but we’d suggest any reasonably logical calculation should be fine.
The above calculations will need to be based on the employee’s reference period. Oversimplifying a little, if you were on the payroll in February 2020, use the salary from that month. If you only joined the payroll after that, use October 2020’s salary.
NB claims are only based on salary, they should not also include dividends.
For our typical director client there won’t be any pension amounts to claim reimbursement for, as this only applies to statutory minimum auto enrolment required pensions. Therefore if you have been making a voluntary monthly pension contribution for yourself, and have done for some time, the government won’t reimburse any of this.
Equally it’s unlikely there will be any employer’s NICs to reimburse, as generally for our clients if any amount would have been suffered here, it would have been covered by the employment allowance anyway.
You’ll need to manually enter the full name and NI number of each employee you’re claiming for. The “Payroll number” section can be ignored.
Request funding be paid into your company bank account, not a personal bank account. It will ask for postal address for the bank which you may not know especially if you largely use online banking. If you Google the bank sort code, you should be able to find an address easily enough.
We would suggest you put your own details for who should be contacted with any queries, not details of your accountant.
Take a screen print of the confirmation page at the end with claim reference number. We understand you will not get an automated email/similar confirming your submission.
Apparently funds should be received within 6 working days of completing the form.