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Business management

Furlough application scheme now open

HMRC has produced a step-by-step guide for employers to help them understand the rules for furloughing employees.

The Coronavirus Job Retention Scheme (CJRS), part of chancellor Rishi Sunak’s package of support for businesses throughout the Covid-19 crisis, is now live and enables employees to remain on the payroll through being ‘furloughed’.

Furlough in this context is where an employee or worker agrees in writing with their employer that they are to suspend work temporarily as a result of the coronavirus pandemic. And whether they work full time or part time, employees, workers, agency workers, those on zero-hours contracts and apprentices can all be put on furlough.

Employers can claim furloughed workers’ wages for up to 80% or £2,500 through HMRC’s online application service, which has been put in place to handle up to 450,000 applications an hour. Employers should then receive the money to pay their employees within six days, enabling them to meet the April payroll.

The Treasury has said the CJRS is now open until the end of June, to “allow firms from across the UK to continue to protect millions of jobs”.

Submitting an application for the Coronavirus Job Retention Scheme

HMRC says it has emailed two million employers providing a link to a five-step guide to claiming. Tips for making an application include:

  • Businesses need to make sure that they follow correct legal process when furloughing an employee, as it is strictly a change to their employment contract.
  • Careful calculations are required in relation to holiday pay, maternity pay, sick pay, pensions and salary sacrifice as these can give rise to anomalies.
  • When making the application, all the information must be submitted at once, ie there is no option to save and return to the form later. In addition, amendments cannot be made to the form after submission, so it’s important that the application is submitted fully and accurately at the first attempt.
  • HMRC will not provide any email confirmation for submission, so the employer should print the submission record and make a note of the reference number.
Stay alert to fraud

HMRC has also warned employers to be aware of scams that are currently circulating. Police have smashed a criminal gang that had been offering fraudulent tax refunds during the pandemic. The gang sent correspondence purportedly from HMRC telling recipients they were eligible for a tax rebate or payment to support those without a job or on reduced wages, with links to fake websites designed to access the person’s bank details, passwords and card numbers. Police officers raided several addresses, seizing mobile phones, SIM cards and computers linked to the text message scams and emails.

When putting in their claims for wages, business leaders are being reminded to ensure that their claim is as accurate as possible and not to call HMRC unless they have a problem. This is to keep the lines free for those who really need it.

Nimesh Shah, partner at tax advisory firm Blick Rothenberg, told WalesOnline: “The government has been vocal that it can and will audit employers and claw back grants from fraudulent claims. Errors with applications are inevitable, given the complexity associated with this untested scheme, and it’s hoped that HMRC will recognise the difference between innocent and deliberate behaviour, but claimants must make sure that their application is as accurate as it can be.”

He added: “To introduce a new scheme of this scale and have an operational portal ready within a month is impressive, and HMRC and the government should be applauded for their efforts. It is hoped that HMRC’s system is able to cope with the inevitable demand, and that payments can be processed and paid within the six working day time frame.”

For further information visit GOV.UK .

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