15 April 2020
15.04.20 – The Coronavirus Job Retention Scheme – the HMRC portal goes live on 20 April
The Chief Executive of the HMRC has announced the portal will be open on 20 April 2020. It is HMRC's aim for employers to be paid the first furlough payments four to six working days after submission of their claim.
On 8 April 2020, HMRC started online testing of the new online portal with a small number of employers in order to test the usability of the online service and the supporting guidance, and to help it gauge the likely need for additional support for employers. The Treasury Committee indicated that it would imminently produce operational guidance for employers.
HMRC are expecting that most employers will attempt to put in their claim for reimbursement in the first couple of days after the scheme opens. However, the new online system has been stress-tested to deal with up to 450,000 claims an hour and HMRC are confident that it can deal with a large volume of claims. Additional HMRC staff will be redeployed to its helpline to assist employers, the HMRC's aim is for all employers to be able to self-serve and use the online portal without assistance
As it stands the revised guidance sets out only the basic information that must be provided, and that the employees must have agreed to be and been placed on furlough before the claim is made.
To claim, businesses will need:
- the employer's ePAYE reference number;
- the number of employees being furloughed;
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 consecutive weeks);
- the employer's bank account number and sort code;
- the employer's contact name;
- the phone number;
The employer will have to do the maths on calculating the amount of the claim in advance including;
- 80% of ‘normal pay' versus £2,500 maximum claim amount;
- pro rata calculations;
- minimum auto enrolment employer pension contributions;
- employer National Insurance (excluding voluntary top ups);
- past overtime, fees and compulsory commission payments.
Discretionary bonus, commission payments, salary sacrifice and non-cash payments cannot be claimed.
Whatever the amount claimed for the grant as pay, must be paid to the employees.
The revised guidance indicates that the claim should be made on the basis of the employer's payroll and the amounts included on the pay roll, subject to any variations have been agreed with the employee. It will be necessary to keep records of the calculation as the revised guidance indicates that the HMRC may retrospectively audit a claim.
The claims can only be submitted once every three weeks, the implication is that this is per employer and the entirety of the workforce on an employer's PAYE i.e. claims to be submitted in bulk for each employer.
The employer will be responsible for covering the costs of the wage bill for all staff (weekly and monthly paid) until the claim is submitted and funds received.
It is clear that the claim can be backdated to 1 March 2020, if the employees were not working from that date. Claims should be started from the date that the employee finishes work and starts to furlough, not when the decision was made, or when written confirmation was sent to employees confirming an employee's furloughed status.
Payment is made to the stipulated bank account but there is no indication of the time scale for payment other than that it is said that all claims will be processed before then scheme ends.
In the first instance we know the scheme is intended to last until 30 May 2020. It is anticipated that the scheme may be extended to negate employers falling foul of the law relating to collective consultations. The last date for the Government to announce an extension is 18 April 2020.
IMPORTANT - you may need to take action now
You must have:
- created and started a PAYE payroll scheme and notified to HMRC on an RTI submission on or before 19 March 2020
- enrolled for PAYE payroll scheme and notified to HMRC on an RTI submission on or before 19 March 2020
- enrolled for PAYE online - this can take up 10 days
- a UK bank account
VERY IMPORTANT - you may need to enrol for a PAYE online account. Do this now to avoid delays to your payments. You can do that here - https://www.gov.uk/paye-online/enrol
Prevention of fraud
HMRC will investigate claims after the event, will claw-back funds from employers where it determines erroneous payments were made, and will take action against those who have knowingly tried to defraud it. However, it considers that the following will assist in preventing fraud or abuse of the scheme:
- The design of the scheme, including the requirement that an employee or PAYE worker be on their employer's payroll on 19 March 2020
- Only authenticated employers who have an existing PAYE system set up will be able to access the portal
- HMRC will run checks in the background to risk assess claims before payment is made
- There will be the ability to report suspected fraud of others
Employers should keep track of the guidance for employers from the following sources:
COVID-19: claim for wage costs
COVID-19: support for businesses.gov.uk
Thomson Reuters Practical Law