The Coronavirus Job Retention Scheme: How to make a furlough claim

The Coronavirus Job retention scheme (CJRS) was put in place by the government to temporarily support UK businesses, charities and not-for-profit organisations struggling to pay their workforce due to the impact of COVID-19. Under the CJRS, employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. You can read more about the furlough here.

SD Worx pay services operate as an e-filing agent for our customers. We exchange Real Time Information Result (RTI) files automatically from our customers’ processed payroll and optionally collect PAYE tax code and other notification to be applied to payroll. The CJRS process is a grant application for a business and needs to be reflected in the business’ accounts.

Our responsibilities to our customers
SD Worx will apply the notified payments our customers have agreed with their furloughed employees via payroll. The pay results will continue to be reported to HMRC and available in their reporting portal at SD Worx. 

Employers may want to identify furloughed employees in a different way, or they might want to separate out furlough payments. There is no legal requirement to do so as the payment and the grant application are separate activity. Information required to assist with the grant application can be provided. This relates to name, National Insurance Number and Payroll Identifier (optional). 

Employer responsibilities
The employer needs to maintain records of its furlough activity retaining employee agreements, dates associated and calculate amounts in relation to the grant application. The employer will be required to make the grant application either themselves or via their HMRC 64-8 authorised tax agent. The following provides details of the grant application process.

Employers can claim for 80% of their employee’s wages, plus any employer National Insurance and pension contributions, if they have put them on furlough because of COVID-19 using the online service, which you can access here.

You’ll need the Government Gateway user ID and password you received when you registered for PAYE online. If you have not registered for PAYE online, do it as soon as possible or your grant money may be delayed.

The government have provided an online calculator which you can use to work out the figures you’ll need when you complete an online claim through the scheme. However, it’s aimed at organisations with a small number of employees. Unfortunately, it won’t work for employees who:

• Receive any top-up pay in the claim period
• Returned from statutory leave such as maternity leave in the last three months
• Get director’s payments
• Have been transferred under TUPE
• Have been employed at separate times throughout the year
• Receive employer pension contributions outside of an auto-enrolment pension scheme
• If you cannot use this calculator, work out what you can claim manually using the calculation guidance or seek professional advice.

Please be aware that it’s your responsibility to check that the amount you’re claiming for is correct.

How is furlough calculated?
The calculator will work out the amounts you need to enter in the claim form. These are:

• Gross amount paid to a furloughed employee
• Employer National Insurance contributions
• Employer minimum auto-enrolment pension costs

 It will also give you a breakdown of the calculations for each pay period for one employee.

The government have produced a step by step guide for employers claiming employees’ wages through the CJRS. The resource explains the information that employers need to provide to HMRC to make a grant claim. Grant Payments are anticipated to be paid within 6 days.

 This step by step guide will take you through five sections:

Step 1: Essential information
Step 2: Before you make your claim
Step 3: Calculating your claim
Step 4: Making a claim
Step 5: What to do next

You can access the guide here.

Information on the Coronavirus Job Retention Scheme:

UK Government
ACAS 
Treasury Direction

The Pension Regulator has issued the following guidance on pension and salary sacrifice implications.

Employers can get advice about the Coronavirus Job retention Scheme online, via webchat, or by calling 0800 024 1222.
SD Worx Payroll and legislation expert, Simon Parsons, is hosting a live webinar on April 29th