coins-pixabay-1523383_1920

Furlough – Waiting for the portal to open

16 April: It seems the vast majority of businesses are having to furlough at least some of their employees and all of them are waiting for HMRC’s new portal to open on 20 April.

Statistics

It is estimated that there are more than 30 million workers in the UK, of which about 25 million are employees. If on average 50% UK businesses furlough 50% of their employees and the average business employs 25 people, that gives 6.5 million individual data entry lines and 260,000 furlough claims a month.

Practicalities

The numbers are huge and until we can see the portal, we aren’t really going to be able to be 100% sure how it will all work.

For weekly payrolls, you could be logging on once every three weeks and the first claim would include the March and April periods up to the last RTI submission. But if you have both weekly and monthly payrolls, you can only make one claim every 3 weeks, so most businesses will wait and claim once the monthly RTI submission has been completed.

For monthly payrolls you would probably log a claim after you submit your monthly RTI for April and claim for March and April in the one claim.  Your next claim would be after the May RTI submission some 4 weeks later.

So although you can only log a claim every three weeks, we don’t believe it is a claim for 3 weeks furlough pay, its just a reporting mechanism to report the furlough amounts since the last claim (so the first claim is a large claim if you had furlough in March).  Also we don’t believe you will need to log a claim every 3 weeks, you can wait longer but you can’t claim sooner than every 3 weeks.

The basis of your claim

The amount to be claimed is 80% of salary (to a maximum of £2,500 per month) plus ER’s NIC and 3% ER’s pension. This can cause some calculation problems if there is a part furlough period. In our calculations we have allocated the lower earnings thresholds, for NIC and to calculate ER’s Pension, over the furlough and non furlough salaries during the pay period to share these costs proportionately. Each employee must be furloughed for at least 3 consecutive weeks to make a claim under the scheme.

Furlough a director
There is still a lot of confusion over whether a director can be furloughed or effectively furlough themselves. Whilst this is in theory possible, a condition of furloughing is that the individual must not undertake work of any kind for the company during this time.

The only exception to this is statutory duties of the director, but this exception does not extend to anything designed to improve the financial performance of the business.

Weighing against this is the statement from HMRC that they will retain the right to retrospectively audit all aspects of your claim

For more information, please contact Karen Keeling, Dafferns Tax Director