As of 20 April 2020, the Coronavirus/COVID 19 Job Retention Scheme (CJRS) claim system is live. This means employers can now lodge a claim for the 80% of 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.
NEW (early June 2020 update) – whilst CJRS will firms already claiming/employees already furloughed will continue for Summer and into Autumn 2020, the deadline for new furlough claims is end of June. To be more precise, the staff member in question must have been furloughed for at least 3 weeks by 30 June 2020 (hence furloughed from 10 June 2020 at the latest). Also the claim must be lodged by no later than 31 July 2020. For those businesses that did claim prior to this date and continue to do so, the amount that can be claimed is gradually reducing from August onwards.
Must have been furloughed
You can only claim for employees furloughed for at least a 3 week period. 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. This is an all or nothing, so if you have been working but less than normal, you wouldn’t be able to 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 March today, with the intention of submitting again for another staff member also for March 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.
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 March 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 March 2020 – 31 March 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.
Amount of claim
If you use FreeAgent, they have a tool to help with the calculations. Details of which are found here.
Otherwise if you’re going to do it manually, 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 £719/month, it would be £575.20 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 £719/month, then the total claim for the month would be £1,150.40.
If you worked for some of the month, but not all (and assuming you were furloughed for at least 3 weeks), then you’ll need to claim pro rata. Eg if your salary is £719/month, you worked for (say) the first 13 days of the month, but were furloughed from Saturday 14th onwards, potentially a claim would be £333.99 (£719 * 80% * 18/31). It seems there are a few different methods of calculating this, but we’d suggest any reasonably logical calculation should be fine.
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.