20 Apr Coronavirus job retention scheme: step by step guide for claiming
Step 1: Essential information
Before proceeding with your claim, you must read the following guidance:
https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
The process is designed to be simple to use. You will be required to provide details that you currently use for your payroll. To ensure that you the process is as smooth as possible please ensure you have all information required in steps 2 and 3 before making a claim.
It is the claimant’s responsibility to ensure that the information provided in the application is accurate.
You cannot make more than one claim during a claim period – you should make your claim shortly before or during running a payroll. You must claim for all employees in each period at one time as you cannot make changes to your claim.
Step 2: Before you make your claim
• Getting ready to make your application
The scheme will be open to make claims on April 20th. Once an application is made you will receive payments within six working days. If you wish to receive payments from the scheme by the end of the month, you will need to submit the claim at least six working days in advance for the money to clear in your bank account.
If you have an authorised agent, you should decide whether you want them to act on your behalf.
• Applying through an agent
If you have an agent that has authorisation to act for you on PAYE matters online, they can make a claim for CJRS on your behalf. If an agent makes the claim for you just let them know which bank account you want the funds to be paid into. Please contact payroll@infinity-partnership.com if you use our payroll services and we can assist you with this.
• Making the claim yourself
To make a claim yourself you must gather the following information before proceeding to step 3:
1. The number of employees being furloughed
2. The dates employees have been furloughed to and from
3. Details of employees – the name and national insurance number of each furloughed employee
4. Your employer PAYE scheme reference number
5. Your corporation tax unique taxpayer reference, self-assessment unique taxpayer reference or company registration number as appropriate for your entity.
6. Your UK bank account details
7. Your organisations registered name
8. Your organisations address
You should make sure you have this information ready before you access the system to make a claim.
Step 3: Calculating a claim
For most employers with full-time or part-time employees on a set salary, you will need to work out the following for the claim period:
1. The total amount being paid to furloughed employees (you can claim for 80% of your employees’ wages – up to a maximum of £2500 a month per employee)
2. The total employer NICs
3. The total employer pension contributions (up to 3%)
Example calculation for an employee on a fixed salary
An employee started work for Smith Ltd in 1997 and is paid a regular, fixed monthly salary on the last day of each month. They are also auto-enrolled into the workplace pension. The employee agreed to be placed on furlough from 21 March 2020, at 80% of their salary.
A. Calculating the grant for gross pay
The employee was paid £2,400 in gross salary for February, the last full monthly pay period before 19 March 2020.
21 March to 31 March is 11 days. So, the reference salary for the part of March in which the worker is furloughed is:
£2,400 divided by 31 days in March = £77.42
£77.42 multiplied by 11 days of furlough = £851.62
Smith Ltd can claim 80% of this amount, up to the ‘maximum amount’ for the time on furlough in March: 80% of £851.62 is £681.30
The maximum amount test is: Monthly maximum of £2,500 divided by 31 days in March = £80.65
£80.65 x 11 days of furlough = £887.15
Smith Ltd claims the lower amount, £681.30, for the employee’s gross pay in March.
B. Calculating the grant for employer National insurance contributions (NIC)
The employee’s gross pay at the end of the month is made up of £1,548.40 of salary funded by Smith Ltd, for 1 to 20 March (20 days), and £681.30 of pay funded by CJRS for the remaining 11 days of March.
The employer NICs due on the total gross pay of £2,229.70 is £208.48
Step 1: £208.48 divided by 31 days in March = £6.73
Step 2: Daily employer NIC amount of £6.73, multiplied by 11 furlough days = £74.03 Smith Ltd claims £74.03 for employer NIC’s due on the employee’s March pay.
C. Calculating the grant for employer pension contributions
The monthly lower level of qualifying earnings of £512 (for March 2020) is apportioned based on the number of days in the month to the qualifying furlough days:
£512 divided by 31 = £16.52
£16.52 multiplied by 11 days = £181.72
The minimum level of auto-enrolment pension contributions on the £867.10 furlough pay is therefore:
£681.30 – £181.72) x 3% = £14.99
This is the lower of £14.99 or the employer pension contributions due on the furlough pay under the terms of the pensions scheme.
Smith Ltd claims £14.99 for the employer pension contributions for March.
Total claim for employee
Smith Ltd claims a total of £770.32 from the CJRS for the employee in March. This is made up of £681.30 for gross pay, £74.03 for employers NIC and £14.99 for employer pension contributions. Smith Ltd has checked that they are not claiming for more than they are going to pay out.
More information and further examples on complex contracts and variable pay is available at the following link:
https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme
The following claim calculator is also available to check your claim: https://www.tax.service.gov.uk/job-retention-scheme-calculator/?_ga=2.207454739.1826819095.1587377880-1735836702.1585138932
If you have an agent, they will also be able to assist with calculating your claim.
Step 4: Making a claim
Do not start a claim until you have gathered all the information required in steps 2 and 3.
To access the system on GOV.UK you or your agent will need to have:
• A government gateway ID and password
• An active PAYE enrolment
If you do not have these, you can register for them at:
https://www.gov.uk/log-in-register-hmrc-online-services/register
https://www.gov.uk/paye-online/enrol
The application needs to be done in one session and there is currently no save and return option. Sessions will time out after 30 seconds of inactivity.
Once you are ready go to GOV.UK to make your claim. You will be taken through a series of steps in the online service. You will need to confirm that you have furloughed your employees, then you will need to input the information about your organisation which you prepared in step 2.
After this, you will need to confirm the amount of the claim – split into the total amount to be paid to furloughed employees and the total pension and national insurance contributions, that you will have prepared at step 3. Before you submit the application, you will also need to confirm your employees’ details, enter your UK bank details and your address.
Once you have submitted the claim, you will see a confirmation screen where a claim reference number will be provided. Print the confirmation screen or note down the claim reference number provided – you will not receive an email confirmation.
If you are submitting the claim yourself, it is your responsibility to check the accuracy of your claim.
If you are using an agent, ask them to note down and share the calculations that form the basis for your claim and the claim reference number provided. They will not receive an email confirmation, but they can print the confirmation screen.
To ensure that the funds are paid as quickly as possible to you, your agent should input your bank details into the system, not theirs.
If you are an employer with more than 100 employees you will need to provide more detail in your submission:
• Claim amount per furloughed employee
• Claim period for each furloughed employee
The claim must also be uploaded in one of the following formats:
• XLS, XLSX, CSV, ODP
Step 5: what to do next
1. HMRC will review your claim and you will receive the funds within six working days.
2. Keep hold of your claim reference number.
3. Retain calculations that form the basis of your claim in case further information is required by HMRC.
4. Tell your furloughed employees that you have made a claim and that they do not need to take any further action. They should not contact HMRC to check the status of a claim.