Orr Litchfield
Solicitors and Business Lawyers
Solicitors and Business Lawyers
Introduction
The UK Government has publicly announced that it will be ready to launch the Coronavirus Job Retention Scheme (the ‘CJRS’) on 20th April 2020 as the first part of its response to provide direct financial support to assist businesses, business owners and individuals through the financial difficulties arising from the coronavirus outbreak. HMRC had written to agents (dealing with PAYE for businesses) earlier this month notifying them of the proposed launch date.
This article is intended to provide an overview of the information and documentation which business owners, directors and managers will need to make a claim under the CJRS and the steps that they should take in order to be ready to make a claim. For an overview of the CJRS and answers to a range of questions relating to it, see our article at Get ready for the Coronavirus Job Retention Scheme Launch on 20th April 2020
What is the CJRS?
It seeks to provide income protection for those employees, who would otherwise be laid off or made redundant during the coronavirus outbreak. It does so by making payments to employers, who apply under the CJRS in relation to qualifying employees. Eligible employers will be able to reclaim up to 80% of the wage costs of furloughed employees up to a cap of £2,500 per month (plus associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions).
When can support be claimed?
Employers cannot apply under the Scheme yet. HMRC currently expects to launch an online service for CJRS on 20th April 2020. You should make sure that you are fully prepared by:
(a) Ensuring that you have all relevant information and documentation in order to enable you to make your claim once the HMRC portal becomes operational; and
(b) Where you use an accountancy firm or other agent for PAYE purposes, making sure that they are entitled to make the claim on your behalf and, if so, that they have all relevant information and documentation to make a claim on your behalf once the HMRC portal becomes operational.
You will only be able to submit one claim every 3 weeks. That is the minimum period for which an employee can be furloughed. However, claims may be backdated to 1st March 2020, where appropriate.
The Government has suggested that claimants should make their claim in accordance with actual payroll amounts at the point at which they run their payroll or in advance of an imminent payroll. It appears likely that a large volume of claims will be made when the portal opens in relation to employees who have already been furloughed.
What information will you need to make a claim?
When the Government updated its Guidance on the CJRS on 9th April 2020, it added to the list of information required to make a CJRS claim. Accordingly, in order to make a claim, you will need to calculate the amount you are claiming and then be able to provide the following information:
(a) your employer PAYE reference number;
(b) the number of employees being furloughed;
(c) the National Insurance numbers of the employees being furloughed;
(d) the names of the employees being furloughed;
(e) the payroll/works number for the employees being furloughed;
(f) your Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number – we suggest that you ensure that you have all information available;
(g) the claim period (start and end date);
(h) amount claimed (per the minimum length of furloughing of 3 weeks);
(i) your bank account number and sort code;
(j) your contact name; and
(k) your phone number.
HMRC will retain the right to retrospectively audit all aspects of your claim.
Can your Agent make a claim on your behalf?
If you use an agent who is authorised to act for you for PAYE purposes, they will be able to make a claim on your behalf. This may be your accountants.
If you use a file only agent (who files your RTI return but does not act for you on any other matters) they will not be authorised to make a claim on your behalf and you will need to make the claim yourself. Your file only agent can assist you in obtaining the information, which you need to make a claim (which is listed above).
If you are unsure as to whether your agent can make a claim on your behalf, you should contact your agent.
How will support be paid?
Once HMRC has received and processed your claim and determined that you are eligible for the grant, HMRC will pay it via BACS payment to the UK bank account, which you have specified. You must pay each employee the whole amount of the grant which you receive from HMRC for their gross pay. You may not deduct any amount for fees, charges or other sums for obtaining the money under CJRS.
Once the Scheme has been closed by the government, HMRC will continue to process the remaining claims made before terminating the Scheme.
Need to talk?
Whatever stage you or your business has reached, we can help you to understand the different legal and related issues arising from the coronavirus outbreak so that you can choose the option that is right for you and/or your business.
Contact us
If you would like more information about the Coronavirus Job Retention Scheme or the other measures taken by the UK Government in relation to the coronavirus outbreak or would like to discuss a potential or existing issue, please contact us by telephone on +44 (0)20 3126 4520 or +45 38 88 16 00 or by email at enquiries@orrlitchfield.com
Disclaimer
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full Legal Notices on our website.
©Orr Litchfield 2020
