Furlough is the topic which has been causing our business the most amount of questions and stress in equal measure. The government have released more information, but it’s still causing lots of questions.
So here’s what we know (or don’t) and an overview of our plan –
- It’s HMRC’s ambition to open the portal on 20th April 2020.
- Only employees employed prior to 19th March, and submitted to HMRC on or before that date, can be claimed for
- We are aiming to submit the first claims that day, or very early in the morning on 21st April to avoid the masses
- I’ve created a flow chart showing our intended process
- The money will be paid 6 working days later
- There will be fees from us in some cases
- We’re not sure how holidays interact with furlough
- Written records must be kept for 5 years
The detail
Portal opening
HMRC are hoping to open the portal on 20th April. We are hoping to submit claims Monday and Tuesday for the customers we can. We’ve been doing a lot of work in the background to get ready for this for you.
The guidance has been clarified for newer PAYE schemes. Only those who had employees submitted to HMRC on or before 19th March will be eligible to claim. This could put a small number of you into financial difficulty, we will speak to you individually about this.
A Drawing / our initial process
This was inspired by a chat with a customer today, and it aims to guide you through if you need to contact us or not re furlough.
We’re taking a lot of messages about it at the moment and, for the next few days at least, just want to focus on the claims which are going in early next week.
If my drawing doesn’t make sense, the businesses we’ll be submitting claims for are ones which furloughed and paid staff on or before 15th April.
If you paid staff after this date under the furlough rules, your claim will go on the next run which will be about 10 days later. If that’s going to cause you financial hardship, email me direct and we’ll arrange a call.
The money is going to be paid 6 working days later. We’ll let you know when your claim goes in.
Our fees
If we currently look after your payroll, your fees are up to date and you’re on a monthly direct debit for services (or agreed annual payer) which includes payroll, we will submit all filings to the portal free of charge for you.
If we currently do not manage your payroll service, or your account is not paid up to date, and you would like us to submit the claims to HMRC for you, we will charge the following fees as a one-off piece of extra work:
£75 + VAT for monthly payroll portal claims
£130 + VAT for fortnightly payroll portal claims
£195 + VAT for weekly payroll portal claims
The above fees include all submissions required up to and including 30th June 2020 and are payable on first receipt of the funds from HMRC. You can save these additional fees by bringing your account balance up to date if we currently manage your payroll.
If you’re not on a monthly direct debit, call me to arrange a meeting and we can credit the fees above of your account once you are.
Other furlough issues
Holiday pay
We’re not sure how holiday pay interacts with furlough. There’s an article written here by employment law barrister, Daniel Barnett, here which suggests you can get the government to pay 80% of the holiday pay.
However, we’ve not seen anything else which backs this up – and I’ve spoken to a lot of people about it.
The discussion going on is whether paying staff holiday pay, say to top up their wage to 100%, breaks the furlough period and so your chance to make a claim.
Our initial advice for now, is to wait and see what changes in the next couple of weeks. Enough people are asking the question for this to be addressed.
Written Records
The updated guidance here also states that you need to obtain written confirmation from your employees that they know they are being furloughed. We sent a document earlier last month which would work for this. I’ve attached again.
You must keep these records for 5 years! I think email confirmation will work in these circumstances too.