Coronavirus Job Retention Scheme - full guidance - Unw LLP
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Coronavirus Job Retention Scheme
20 April 2020
Coronavirus Job Retention
Scheme - full guidance
Including all updates announced on 17 April 2020
The Government has now issued additional guidance in relation to the
Coronavirus Job Retention Scheme (the scheme), which was initially
announced on 20 March 2020, updated on 4 April 2020 with additional
guidance and legislation published on 15 April and on 17 April 2020.
The Job Retention Scheme is a temporary scheme full to HMRC if the claim is based on dishonest or
open to all UK employers until the end of June 2020, inaccurate information or found to be fraudulent.
but may be extended if necessary, and employers
can use this scheme anytime during this period. The Dishonest or deliberately fraudulent claims put
scheme is open from 20 April 2020 for employers to our essential public services and the protection of
make grant claims through a new online portal. livelihoods at risk during these challenging times.
The portal can be accessed here: https://www. HMRC has put in place an online portal for employees
gov.uk/guidance/claim-for-wages-through-the- and the public to report suspected fraud in the
coronavirus-job-retention-scheme Coronavirus Job Retention Scheme.
HMRC has issued a step by step guide here: https:// Following a number of queries raised by employers,
assets.publishing.service.gov.uk/government/ the government has clarified a number of outstanding
uploads/system/uploads/attachment_data/ issues and has set out the main guidance as follows:
file/880099/Coronavirus_Job_Retention_Scheme_
step_by_step_guide_for_employers.pdf 1. What are the main points of the Scheme?
The scheme is designed to support employers Employers will be able to use a portal from 20 April
whose operations have been severely affected by 2020 to claim a grant for the following wage costs:
coronavirus (COVID-19).
• 80% of furloughed employees’ (employees on a
Our specific guide containing detailed calculations leave of absence) usual monthly wage costs, up to
is here: https://www.unw.co.uk/wp-content/ £2,500 a month; plus
uploads/2020/04/UNW-CJRS-Illustrative-Examples. • the associated Employer National Insurance
pdf contributions; and
HMRC will check claims made through the scheme. • the minimum automatic enrolment employer
Payments may be withheld or need to be repaid in pension contributions on that wage.
The scheme is open to all UK employers who had: This means an RTI submission notifying payment in
respect of that employee to HMRC, must have been
• created and started a PAYE payroll scheme on or made on or before 19 March 2020.
before 19 March 2020
• enrolled for PAYE online Employees that were employed as of 28 February
2020 and on payroll (i.e. notified to HMRC on an RTI
• a UK bank account
submission on or before 28 February) and were made
redundant or stopped working for the employer after
2. Who can claim the grant? that and prior to 19 March 2020, can also qualify for
Any UK organisation with employees can apply, the scheme if the employer re-employs them and puts
including: them on furlough.
• businesses Furloughed employees can be on any type of contract,
including:
• charities
• recruitment agencies (agency workers paid through • full-time employees;
PAYE) • part-time employees;
• public authorities • employees on agency contracts; and
Where a company is being taken under the • employees on flexible or zero-hour contracts
management of an administrator, the administrator Foreign nationals are eligible to be furloughed. Grants
will be able to access the Scheme. However, it is under the scheme are not counted as ‘access to public
expected that an administrator would only access the funds’, and employers can furlough employees on all
scheme if there is a reasonable likelihood of rehiring the categories of visa.
workers. For instance, this could be as a result of an
administration and pursuit of a sale of the business.
6. What is the minimum furlough period?
3. Are Public Sector organisations eligible? Any employees placed on furlough must be furloughed
for a minimum period of 3 consecutive weeks. When
The government expects that the scheme will not be they return to work, they must be taken off furlough.
used by many public sector organisations, as most Employees can be furloughed multiple times, but each
public sector employees are continuing to provide separate instance must be for a minimum period of 3
essential public services or contribute to the response consecutive weeks.
to the coronavirus outbreak.
Where employers receive public funding for staff costs, 7. Can an employee continue working once
and that funding is continuing, employers are expected furloughed?
to use that money to continue to pay staff in the usual
To be eligible for the subsidy, when on furlough, an
fashion – and correspondingly not furlough them.
employee can not undertake work for or on behalf
This also applies to non-public sector employers who
of the organisation or any linked or associated
receive public funding for staff costs.
organisation. This includes providing services or
Organisations who are receiving public funding generating revenue. Employers are free to consider
specifically to provide services necessary to respond to allocating any critical business tasks to staff that are
COVID-19 are not expected to furlough staff. not furloughed. While on furlough, the employee’s
wage will be subject to the usual income tax and other
In a small number of cases, for example where deductions.
organisations are not primarily funded by the
government and whose staff cannot be redeployed to 8. What happens if an employer made employees
assist with the coronavirus response, the scheme may redundant or they stopped working for them
be appropriate for some staff. after 28 February?
4. Are individuals eligible to access the scheme? If an employer has made employees redundant, or
they stopped working for them on or after 28 February
Individuals can furlough employees, such as nannies, 2020, the employer can re-employ them, put them on
provided they pay them through PAYE and they were furlough and claim for their wages through the scheme.
on their payroll on, or before, 19 March 2020. This applies to employees that were made redundant
or stopped working for the employer after 28 February,
5. Which employees can an employer claim for? even if they are not re-employed until after 19 March.
Furloughed employees must have been on the This applies as long as the employee was on the
employer’s payroll on or before 19 March employer’s payroll as at 28 February and had been
2020, and which were notified to HMRC on an RTI notified to HMRC on an RTI submission on or before 28
submission on or before 19 March 2020. February 2020. This means an RTI submission notifyingpayment in respect of that employee to HMRC must pay them at least 80% of their regular wages, up to the
have been made on or before 28 February 2020. monthly cap of £2500.
If an employee has had multiple employers over the If an employee went on unpaid leave on or before 28
past year, has only worked for one of them at any one February, the employer cannot furlough them until the
time, and is being furloughed by their current employer, date on which it was agreed they would return from
their former employer/s should not re-employ them, put unpaid leave.
them on furlough and claim for their wages through the
scheme. 13. What happens if the employee is self-isolating
or on sick leave?
9. Can an employee continue working for
reduced hours/reduced pay? Employees on sick leave or self-isolating as a result of
Coronavirus, should get Statutory Sick Pay subject to
If an employee is working, but on reduced hours, or for other eligibility conditions applying. The Coronavirus
reduced pay, they will not be eligible for this scheme. Job Retention Scheme is not intended for short-term
absences from work due to sickness, and there is a
10. Does the employer need the agreement of 3-week minimum furlough period.
employees?
Short term illness/ self-isolation should not be a
Employers should discuss with their employees and consideration in deciding whether to furlough an
make any changes to the employment contract by employee. If, however, employers want to furlough
agreement. When employers are making decisions in employees for business reasons and they are currently
relation to the process, including deciding who to offer off sick, they are eligible to do so, as with other
furlough to, equality and discrimination laws will apply in employees. In these cases, the employee should no
the usual way. Employers do not need to place all their longer receive sick pay and would be classified as a
employees on furlough. However, those employees furloughed employee.
who are placed on furlough cannot undertake work for
them. 14. What about Employees who are Shielding?
To be eligible for the subsidy employers must write Employers are also entitled to furlough employees who
to their employee confirming that they have been are being shielded or off on long-term sick leave. It is
furloughed. There needs to be a written record, but the up to employers to decide whether to furlough these
employee does not have to provide a written response. employees. Employers can claim back from both the
Coronavirus Job Retention Scheme and the SSP rebate
A record of this communication must be kept for five scheme for the same employee, but not for the same
years. period of time.
An employer does not need to place all their employees When an employee is on furlough, the employer can
on furlough. However, those employees who are placed only reclaim expenditure through the Coronavirus Job
on furlough cannot undertake work for their employer. Retention Scheme, and not the SSP rebate scheme. If
a non-furloughed employee becomes ill, needs to self-
11. Can apprentices be furloughed? isolate or be shielded, then the employer might qualify
for the SSP rebate scheme, enabling them to claim up
Apprentices can be furloughed in the same way as to two weeks of SSP per employee.
other employees and they can continue to train whilst
furloughed.
15. What happens if an employee becomes sick
However, employers must pay their Apprentices at least while furloughed?
the Apprenticeship Minimum Wage, National Living
Furloughed employees retain their statutory rights,
Wage or National Minimum Wage (AMW/NLW/NMW)
including their right to Statutory Sick Pay. This means
as appropriate for all the time they spend training. This
that furloughed employees who become ill must be
means employers must cover any shortfall between
paid at least Statutory Sick Pay. It is up to employers
the amount they can claim for their wages through this
to decide whether to move these employees onto
scheme and their appropriate minimum wage.
Statutory Sick Pay or to keep them on furlough, at their
Specific guidance is available for changes in furloughed rate.
apprenticeship learning arrangements because of
If a furloughed employee who becomes sick is moved
COVID-19.
onto SSP, employers can no longer claim for the
furloughed salary. Employers are required to pay SSP
12. What happens if the employee is on unpaid themselves, although may qualify for a rebate for up to
leave? 2 weeks of SSP. If employers keep the sick furloughed
If an employee started unpaid leave after 28 February employee on the furloughed rate, they remain eligible to
2020, the employer can put them on furlough instead. claim for these costs through the furloughed scheme.
If the employer puts them on furlough then they should16. How do you treat Employees with caring B) Company Directors
responsibilities? As office holders, salaried company directors are
eligible to be furloughed and receive support through
Employees who are unable to work because they
this scheme. Company directors owe duties to their
have caring responsibilities resulting from coronavirus
company which are set out in the Companies Act 2006.
(COVID-19) can be furloughed. For example,
Where a company (acting through its board of directors)
employees that need to look after children can be
considers that it is in compliance with the statutory
furloughed.
duties of one or more of its individual salaried directors,
the board can decide that such directors should be
17. What if the employee has more than one job? furloughed. Where one or more individual directors’
If the employee has more than one employer, they furlough is so decided by the board, this should be
can be furloughed for each job. Each job is separate, formally adopted as a decision of the company, noted
and the cap applies to each employer individually. in the company records and communicated in writing to
Employees can be furloughed in one job and receive a the director(s) concerned.
furloughed payment but continue working for another Where furloughed directors need to carry out particular
employer and receive their normal wages. duties to fulfil the statutory obligations they owe to their
company, they may do so provided they do no more
18. What if the employee is on a fixed term than would reasonably be judged necessary for that
contract? purpose, for instance, they should not do work of a
kind they would carry out in normal circumstances to
Employees on fixed term contracts can be furloughed.
generate commercial revenue or provides services to or
Their contracts can be renewed or extended during
on behalf of their company.
the furlough period without breaking the terms of the
scheme. There is no minimum period which must be This also applies to salaried individuals who are
left to run on a fixed term contract to enable it to be directors of their own personal service company (PSC).
renewed or extended, but it must not have ended. The
furlough period must be for a minimum period of three C) Salaried Members of Limited Liability
consecutive weeks. Where a fixed term employee’s Partnerships (LLPs)
contract ends because it is not extended or renewed Members of LLPs who are designated as employees
before its natural conclusion the employer will no longer for tax purposes (‘salaried members’) under the Income
be able claim grant for them once the contract ends. Tax (Trading and Other Income) Act (ITTOIA) 2005 are
Fixed term contracts which ended, without extension or eligible to be furloughed and receive support through
renewal, on or before 19 March 2020 will not qualify for this scheme.
the grant once they have ended.
The rights and duties of a member of an LLP are set
19. Can you include any workers who are not out in an LLP agreement and in the absence of an
classed as “employees”? agreement, default provisions in the LLP Act 2000,
based upon company and partnership law. Such an
As well as employees, the grant can be claimed for any agreement may include separate agreement between
of the following groups, if they are paid via PAYE: the LLP and an individual member setting out the terms
• office holders (including company directors) applicable to that member’s relationship with the LLP.
• salaried members of Limited Liability Partnerships To furlough a member, the terms of the LLP agreement
(LLPs) (or any such agreement between the LLP and the
• agency workers (including those employed by member) may need to be varied by a formal decision
umbrella companies) of the LLP, for example to reflect the fact that the
• limb (b) workers member will perform no work in the LLP for the period
of furlough, and the effect of this on their remuneration
The guidance below sets out specific considerations for from the LLP. For an LLP member who is treated as
those individuals who are paid via PAYE, but who are being employed by the LLP (in accordance with s863A
not necessarily employees in employment law. Unless of ITTOIA 2005), the reference salary for this scheme
explicitly set out below, all other guidance is applicable is the LLP member’s profit allocation, excluding any
to these cases, and should be followed. amounts which are determined by the LLP member’s
performance, or the overall performance of the LLP.
A) Office Holders
Office holders can be furloughed and receive support D) Agency Workers (including those employed by
through this scheme. The furlough, and any ongoing umbrella companies)
payment during furlough, will need to be agreed Where agency workers are paid through PAYE, they are
between the office holder and the party who operates eligible to be furloughed and receive support through
PAYE on the income they receive for holding their this scheme, including where they are employed by
office. Where the office holder is a company director umbrella companies.
or member of a Limited Liability Partnership (LLP), the
furlough arrangements should be adopted formally as a Furlough should be agreed between the agency, as the
decision of the company or LLP. deemed employer, and the worker, though it would beadvised to discuss the need to furlough with any end these parties that the contractor is to do no work for
clients involved. As with employees, agency workers the public sector organisation during their period of
should perform no work for, through or on behalf of furlough.
the agency that has furloughed them while they are
furloughed, including for the agency’s clients. The fee-payer would be able to apply for the furlough
payment of 80% of the monthly contract value, up to a
Where an agency supplies clients with workers who maximum of £2,500, as well as the employer NICs on
are employed by an umbrella company that operates that subsidised wage. The fee-payer would then pay
the PAYE, it will be for the umbrella company and the at least the amount of wage-grant received to the PSC
worker to agree whether to furlough the worker or not. and report the payment via PAYE using the contractor’s
details, making the usual tax and National Insurance
E) Limb (b) Workers contributions (NICs) deductions for contracts in scope
Where Limb (b) Workers are paid through PAYE, they of the off-payroll rules. The PSC would then be required
can be furloughed and receive support through this to report the amount it pays to the contractor as
scheme. deemed employment income via PAYE using box 58A
on the PAYE Real Time Information return.
Those who pay tax on their trading profits through
Income Tax Self-Assessment, may instead be eligible Where a contractor is continuing to receive payments
for the Self-Employed Income Support Scheme from a public sector client (including through the
(SEISS), announced by the Chancellor on 26 March CJRS or other any other scheme), income from this
2020. client should be excluded from any calculation of the
reference pay for the purposes of the CJRS if the
20. Are there any rules for contingent workers in contractor also decides to furlough themselves as an
the public sector? employee or director of their own company.
The Cabinet Office has issued guidance on how 22. What if an employee transfers under TUPE or
payments to suppliers of contingent workers on a change in ownership?
impacted by COVID-19 should be dealt with where
the party receiving the contingent worker’s services A new employer is eligible to claim under the CJRS
is a Central Government Department, an Executive in respect of the employees of a previous business
Agency of a Central Government Department or a transferred after 19 March 2020 if either the TUPE or
Non-Departmental Public Body. The guidance is here: PAYE business succession rules apply to the change in
https://assets.publishing.service.gov.uk/government/ ownership.
uploads/system/uploads/attachment_data/file/877221/
PPN02_20-Contingent-Workers-Impacted-by- Specific advice should be taken on both the TUPE rules
Covid-19-2.pdf and the rules on business succession.
This guidance applies to agency workers paid 23. Are there any rules applicable to payroll
through PAYE, as well as those paid through umbrella consolidation?
companies on PAYE and off-payroll workers supplying
their services through a Personal Service Company Where a group of companies have multiple PAYE
(PSC). schemes and there is a transfer of all employees from
these schemes into a new consolidated PAYE scheme
21. Are there any specific rules which apply to after 19 March 2020, the new scheme will be eligible
contractors with public sector engagements in to furlough those employees and claim the grants
scope of IR35 off-payroll working rules (IR35) available under the CJRS.
Public sector bodies will follow the Crown Commercial 24. Can the employee do volunteer work?
Services guidance in the vast majority of cases.
In a small number of cases, for example where A furloughed employee can take part in volunteer
organisations are not primarily funded by the work, if it does not provide services to or generate
government and whose staff cannot be redeployed revenue for, or on behalf of the employer. The employer
to assist with the coronavirus response, it may be can agree to find furloughed employees new work or
appropriate to claim under the CJRS. Contractors who volunteering opportunities whilst on furlough if this is in
are deemed employees according to the off-payroll line with public health guidance.
working rules might be eligible for this scheme.
25. Can a furloughed worker undertake training?
In this scenario, if the public sector organisation
wished to furlough a contractor, they would have to Furloughed employees can engage in training, as long
confirm this with both the contractor’s Personal Service as in undertaking the training the employee does not
Company (PSC) and the fee-payer (as set out in the provide services to, or generate revenue for, or on
off-payroll working rules, usually the agency paying the behalf of their employer. Furloughed employees should
contractor’s PSC). It should be formally agreed between be encouraged to undertake training.Where training is undertaken by furloughed employees, Grants will be prorated if the employee is only
at the request of their employer, they are entitled to be furloughed for part of a pay period.
paid at least their appropriate national minimum wage
for this time. In most cases, the furlough payment of Claims should be started from the date that the
80% of an employee’s regular wage, up to the value employee finishes work and starts furlough, not when
of £2,500, will provide sufficient monies to cover these the decision is made, or when they are written to,
training hours. However, where the time spent training confirming their furloughed status.
attracts a minimum wage entitlement in excess of The way employers work out their employees’ wages is
the furlough payment, employers will need to pay the different depending on what type of contract they’re on,
additional wages (see National Minimum Wage Section and when they started work.
for more details).
a) Full or part time employees on a salary
26. What if the employee is on maternity Leave,
contractual adoption pay, paternity pay or Claim for the 80% of the employee’s salary, as in their
shared parental pay? last pay period prior to 19 March 2020.
The normal rules for maternity and other forms of It is confirmed that if, based on previous guidance,
parental leave and pay apply. an employer has calculated their claim based on the
employee’s salary as at 28 February 2020 (and this
You can claim through the scheme for enhanced differs from their salary in their last pay period prior to
(earnings related) contractual pay for employees who 19 March 2020) the employer can choose to still use
qualify for either: this calculation for their first claim.
• maternity pay b) Employees whose pay varies
• adoption pay If the employee has been employed for 12 months or
• paternity pay more, the employer can claim the highest of either the:
• shared parental pay
• same month’s earning from the previous year; and
27. What can an employer claim? • average monthly earnings for the 2019-2020 tax
year
Please also see our additional guide here: https://www.
unw.co.uk/wp-content/uploads/2020/04/UNW-CJRS- If the employee has been employed for less than
Illustrative-Examples.pdf 12 months, claim for 80% of their average monthly
earnings since they started work until the date they are
Please also see HMRC’s calculator here: https://www. furloughed.
tax.service.gov.uk/job-retention-scheme-calculator/?_
ga=2.202709522.2050774900.1587296850- If the employee has been employed for less than a
897895567.1583936378 month, work out a pro rata for their earnings so far, and
claim for 80%.
An employer can claim for:
28. Does an Employer still have to pay National
• 80% of their employees’ wages (even for employees
Insurance and Pension Contributions?
on National Minimum Wage) - up to a maximum of
£2,500 per month. Employers cannot claim for the Employers will still need to pay employer National
worker’s previous salary; plus Insurance and pension contributions on behalf of their
• Employers National Insurance contributions that are furloughed employees, and they can claim for these
paid on the subsidised furlough pay; plus too.
• minimum automatic enrolment employer pension Employers cannot claim for:
contributions on the subsidised wage up to the
level of the minimum automatic enrolment employer • additional National Insurance or pension
contribution. The maximum level of grant for contributions they make because they chose to top
employer pension contributions on subsidised up their employee’s salary
furlough pay is set in line with the minimum • any pension contributions they make that are above
automatic enrolment employer contribution of the mandatory employer contribution
3% on qualifying earnings. Grants for pension
contributions can be claimed up to this cap
29. Can Past Overtime, Fees, Commission,
provided the employer will pay the whole amount
Bonuses and non-cash payments be included
claimed to a pension scheme for the employee as
in the claim?
an employer contribution.
Employers can claim for any regular payments they are
Employers can choose to top up their employee’s
obliged to pay their employees. This includes wages,
salary, but they do not have to. Employees must not
past overtime, fees and compulsory commission
work or provide any services for the business while
payments. However, discretionary bonus (including tips)
furloughed, even if they receive a top-up salary.and commission payments and non-cash payments 33. How does an employer calculate the claim for
should be excluded. an employee returning from statutory leave?
Statutory leave includes maternity leave, paternity leave,
30. Are there any rules relating to Benefits in Kind
shared parental leave, adoption leave, sick leave and
and Salary Sacrifice Schemes?
parental bereavement leave.
The reference salary for claims should not include the
In line with other employees, claims for full or part time
cost of non-monetary benefits provided to employees,
employees furloughed on return from statutory leave
including taxable Benefits in Kind. Similarly, benefits
should be calculated against their salary, before tax, not
provided through salary sacrifice schemes (including
the pay they received whilst on statutory leave.
pension contributions) that reduce an employee’s
taxable pay should also not be included in the reference Claims for those on variable pay, returning from
salary. Where the employer provides benefits to statutory leave should be calculated using either the:
furloughed employees, this should be in addition to the
wages that must be paid under the terms of the Job • same month’s earning from the previous year
Retention Scheme. • average monthly earnings for the 2019-2020 tax
year.
Normally, an employee cannot switch freely out of a
salary sacrifice scheme unless there is a life event.
HMRC agrees that COVID-19 counts as a life event that 34. What information will be required for
could warrant changes to salary sacrifice arrangements, employers to make a claim?
if the relevant employment contract is updated Employers should discuss with their staff and make any
accordingly. changes to the employment contract by agreement.
Employers may need to seek legal advice on the
31. Do employers still need to pay the process. If sufficient numbers of staff are involved, it
Apprenticeship Levy and Student Loans? may be necessary to engage collective consultation
processes to procure agreement to changes to terms
Both the Apprenticeship Levy and Student Loans
of employment.
should continue to be paid as usual. Grants from the
Job Retention Scheme do not cover these. To make a claim, an employer will need:
32. Are there any National Living Wage/National • their ePAYE reference number;
Minimum Wage implications? • their Corporation Tax Unique Taxpayer Reference,
Self-Assessment Unique Taxpayer Reference or
Individuals are only entitled to the National Living Wage Company Registration Number as appropriate for
(NLW)/National Minimum Wage (NMW) for the hours your entity;
they are working or treated as working under minimum
• the number of employees being furloughed;
wage rules.
• the claim period (start and end date);
This means that furloughed workers who are not • amount claimed (per the minimum length of
working can be paid the lower of 80% of their salary furloughing of 3 weeks);
or £2,500 even if, based on their usual working hours,
• their bank account number and sort code
this would be below their appropriate minimum wage.
However, time spent training is treated as working time • a contact name dealing with the claim; and
for the purposes of the minimum wage calculations and • a contact phone number.
must be paid at the appropriate minimum wage, taking
into account the increase in minimum wage rates from Employers will need to calculate the amount they are
1 April 2020. claiming. HMRC can retrospectively audit all aspects of
an employer’s claim.
As such, employers will need to ensure that the
furlough payment provides sufficient monies to cover • If an employer has fewer than 100 furloughed staff
these training hours. Where the furlough payment is - they will need to enter details of each employee
less than the appropriate minimum wage entitlement they are claiming for directly into the system -
for the training hours, the employer will need to pay this will include their name, National Insurance
the additional wages to ensure at least the appropriate number, claim period and claim amount, and
minimum wage is paid for 100% of the training time. payroll/employee number (optional).
Where a furloughed worker is paid close to minimum • If an employer has 100 or more furloughed staff
wage levels and asked to complete training courses - they will need to upload a file with the information
for a substantial majority of their usual working time rather than input it directly into the system.
employers are recommended to seek independent HMRC’s system will accept the following file
advice or contact Acas. types: .xls .xlsx .csv .odsThe file should include the following information for • Client initiated authorisation process from their
each furloughed employee: business tax account. This is the quickest route to
- name, setting up the appropriate authority and is explained
in detail in Step 4.
- National Insurance number,
- claim period and claim amount, Step 4: Client initiated authorisation process
- payroll/employee number (optional). Prerequisites
• The client must have set up a business tax account
The employer should retain all records and calculations
and have enrolled for PAYE online for employers
in respect of their claims.
(activation codes have been temporarily suspended
so this is instantaneous).
35. Can Agents, such as an accountant or payroll
• The agent must give the client their ‘agent identifier’.
bureau, help employers submit claims?
Exactly which identifier is required often causes
If an employer uses an agent who is authorised to act confusion. The agent can obtain their ‘agent
for them for PAYE purposes, they will be able to make a identifier’ by:
claim on the employers behalf.
1. Signing in to their agent portal using the credentials
If the employer uses a file only agent (who files their RTI they use for payroll clients. On the homepage select
return but doesn’t act for them on any other matters) ‘Authorise client’ from the left-hand main menu.
they will not be authorised to make a claim for the
2. The appropriate identifier will appear on the next
employer and the employer will need to make the claim
screen under the heading ‘Agent identifier’
themselves. The employer’s file only agent can assist
them in obtaining the information they need to claim Process
(which is listed above). HMRC intends to make the
The client must then follow the following steps:
claim process as straightforward as possible so that
most employers are able to make them unaided. • Sign in to their business tax account;
The process to authorise an agent is as follows: • Select ‘Manage Account’; then
• Select ‘Add, view or change tax agent’ option under
Step 1: Agent must be registered the heading Tax Agents; then
Agents must be registered for the PAYE for Agents • Select ‘PAYE for employers’; then
online service with HMRC and have a PAYE agent
• Click ‘continue’ to get to the ‘Manage who can
code.
access your taxes and schemes’ page; then
Step 2: Check authorisation for existing employer • Click the ‘Add an agent’ link next to the relevant
clients service (PAYE in this instance); then
If an agent is unsure of the level of authorisation they • Enter the agent identifier provided by the agent
have for an existing employer PAYE client, they should (confusingly described on this screen as the Agents
check the list of payroll clients in their agent portal. If Government Gateway ID) and click continue; then
the client is listed as ‘confirmed’ they can make CJRS • Click on ‘Add Agent’ to confirm they want to add
applications on their client’s behalf. If they are not listed, the selected agent.
or listed as ‘limited authorisation’ the agent cannot
• The taxpayer will receive on-screen confirmation the
currently claim on behalf of the client.
agent has been added.
The portal sometimes shows ‘limited authorisation’
HMRC is exploring ways to make agent authorisations
when full authorisation is in place. Agents may wish
simpler and hopes to publish further guidance.
to check with HMRC if they think the authorisation
information on the portal is incorrect. If an agent makes a claim on the employers behalf the
employer must tell them which bank account the grant
Step 3: Obtain authorisation for a new client (or
payment should be paid into.
one which is showing as not fully authorised)
There are three possible ways to set up the appropriate
36. When should employers make their claims?
authority:
Employers should make their claim using the amounts
• A paper FBI2 form – not currently recommended
in their payroll - either shortly before or during running
due to possible postal and processing delays
payroll. Claims can be backdated until 1 March where
• Agent initiated online agent authorisation process employees have already been furloughed.
from the agent portal – not currently recommended
due to possible delays receiving the authentication If appropriate, worker’s wages should be reduced to
code, which is posted to the client to give to the 80% of their salary within the employer’s payroll before
agent. they are paid. This adjustment will not be made by
HMRC.37. What will be the process after an employer has 41. Can an employee work for a different
made a claim? employer while on furlough?
HMRC will check the claim, and if the employer is If contractually allowed, an employee is permitted to
eligible, pay it to them by BACS to a UK bank account. work for another employer whilst the employer has
placed them on furlough.
The employer must pay the employee all the grant they
receive for their gross pay. For any employer that takes on a new employee, the
new employer should ensure they complete the starter
Furloughed employees must receive no less than 80% checklist form correctly. If the employee is furloughed
of their reference pay (up to the monthly cap of £2,500). from another employment, they should complete
Statement C.
Employers cannot enter into any transaction with the
worker which reduces the wages below this amount.
This includes any administration charge, fees or other 42. Does the employee have to pay Income tax
costs in connection with the employment. and Employee National Insurance?
Employees will still pay the taxes they normally pay out
38. What will happen once the government ends of their wages.
the scheme?
Employers will still pay employer pension contributions
When the government ends the scheme, the while the employee will still make their automatic
employer must make a decision, depending on their contributions, unless they have opted out of, or
circumstances, as to whether employees can return stopped saving into, their pension.
to their duties. If not, it may be necessary to consider
termination of employment (redundancy).
43. What is the tax treatment of the Coronavirus
Job Retention Grant?
39. What employment rights do furloughed
employees have? Payments received by a business under the scheme
are made to offset these deductible revenue costs.
Employees still have the same rights at work, including: They must therefore be included as income in the
business’s calculation of its taxable profits for Income
• Statutory Sick Pay
Tax and Corporation Tax purposes, in accordance with
• maternity and other parental rights normal principles.
• rights against unfair dismissal
Businesses can deduct employment costs as normal
• redundancy payments
when calculating taxable profits for Income Tax and
Grants cannot be used to substitute redundancy Corporation Tax purposes.
payments. HMRC will continue to monitor businesses
Individuals with employees that are not employed as
after the scheme has closed.
part of a business (such as nannies or other domestic
staff) are not taxable on grants received under the
40. Can an employee do any work for their scheme. Domestic staff are subject to Income Tax and
employer while on furlough? National Insurance Contributions on their wages as
An employer cannot ask their employee to do any work normal.
that:
• makes money for the organisation or any If you have any immediate questions, please do
organisation linked or associated with their not hesitate to get in touch.
organisation
• provides services for the organisation or any
organisation linked or associated with their
organisation Lee Muter
Employment Taxes Partner
Employees can take part in volunteer work or training.
T 07810 852362
E leemuter@unw.co.uk
UNW is a leading independent firm of chartered accountants that delivers a wide range of accountancy and
business advisory services to its clients.
UNW LLP, Citygate, St James’ Boulevard, Newcastle upon Tyne, NE1 4JE
T +44 (0)191 243 6000 E enquiries@unw.co.uk W www.unw.co.ukYou can also read
