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- Member PM.Dip
- Practice Licence
- 71 posts
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Hello,
What are you doling with your furloughed staff and the payrun due at the end of March? I have staff that worked as normal until the 20 Mar and then were furloughed for the last 10 days, so I assume I'll have to pro-rata somewhere. But do I submit a RTI return on the usual date? If so, what do I report? Obviously 100% for the first 20 days of March, but only 80% for the last 10 days? Does the employer pay the net wages and then claim back from HMRC?
Of course it's the last payrun of the year too! Just to make it more imperative to get right!
Hope everyone is ok
Thanks
Clair
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- Member PM.Dip
- Practice Licence
- 71 posts
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Hi everyone,
I have found out that the employer needs to pay the wages and then claims back from HMRC through a website that isn't up and running yet. There are loans available if the employer is experiencing cashflow problems. I still don't know what to report, and is it subject to PAYE and NIC?
What is everyone esle doing?
Thanks
Clair
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- Member PM.Dip
- Practice Licence
- 29 posts
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Clair said:
“
Hi everyone,
I have found out that the employer needs to pay the wages and then claims back from HMRC through a website that isn't up and running yet. There are loans available if the employer is experiencing cashflow problems. I still don't know what to report, and is it subject to PAYE and NIC?
What is everyone esle doing?
Thanks
Clair
”
Hi Clair,
Like you I'd be minded to pay full up to March 20 and 80% for the rest. It may be helpful to create a different pay element for the Furloughed Scheme. I assume that because it is an income it is subject to the normal PAYE rules and in fact this afternoon in the Chancellor's package to the Self Employed, the grant is taxable. The gov.uk website says to designate those employees as furloughed although they are still working out how? If you run payroll monthly then you have the luxury of going back to review March before April payroll by which time I hope how to proceed will be clearer not so if payroll is weekly. If you can stick to the normal RTI deadlines.
Stay safe
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- Member PM.Dip
- Practice Licence
- 71 posts
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Hi Baffour,
Thank you for answering, I have been worrying about getting it wrong. Althiough I would hope that HMRC will be lenient with any mistakes made. So I split the pay into earned wages and furloughed wages, and I did subject both parts to PAYE & NICs. Phew! Now I need to wait for the new HMRC website/portal so I can report the employees as furloughed and claim back the furloughed wages. I am pleased I am only running payroll monthly and, I suppose, I do have a bit more time before the final submission is due, to correct any mistakes.
Thanks again, you have reassured me
Take care
Clair
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- Fellow
- Practice Licence
- 81 posts
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I have to say I have been really struggling with what to do. Thank God for this post and ICB TV as it was only yesterday it all fell into place for me. I missed ICB TV for the first 3 days but now see it as a valuable resource going forward.
Thank you
Jane
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- Member PM.Dip
- Practice Licence
- 4 posts
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I'm running a payrol for furloughed workers today so have been working my way through the ICB TV videos and found this link to a page on the ICB website very useful re: further detail on the grant for furloughed workers.
Thought it might be helpful for others 
https://l.facebook.com/l.php?u=https%3A%2F%2Fwww.bookkeepers.org.uk%2Fresources%2Fnews%2Fcovid-19%2Ficb-tv-episode-1%2Fa%2F8377%3Ffbclid%3DIwAR2S1FoChJqmL8ySwwz-tzD_JRipGo2W0EkEYzG2_3XmwB_lFqHzdlRisoM&h=AT0xd5hK00M-NGI9n5vT9EK_H82gg1AK_guRhMmvutnBZA4TdjTRZ3tKajIwQa74tgsUr9lUjZQFi3T2LkdesMDAIUzwsbcL9OhIEXyWPcfhqB1KfYAs55TV5nT1liTpSPQRVgbpEUMi8bFlawjC
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- Fellow
- Practice Licence
- 81 posts
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Help I'm stuck
I am hoping you can help me clarify how to deal with payroll today with regard the Job Retention Scheme when dealing with zero hours contracts and therefore irregular hours. Whilst I can clearly see they are entitled to 80% of their average salary over the past 12 months the pro rata for this months is throwing up queries.
In particular I have a client who has furloughed all her staff as at 20 March. Do you pay them the difference of what they would have earned for the month (averaged over the past 12 months) less what they have already earned, or, do you work out the pro rata days average earning from 21st , if this is the case for some of the employees it will take their total salary for hours worked to 21st plus furloughed average from 21st to more than the average earnings for the past 12 months which does not seem right? For one employee they have received holiday pay this month which takes them over the average of the last 12 months so would they be entitled to anything.
I could do with some clarity on this one as I am at a loss and cannot find the answer anywhere else.
Thanks
Jane
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- Member PM.Dip
- Practice Licence
- 29 posts
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JC.BKS said:
“
Help I'm stuck
I am hoping you can help me clarify how to deal with payroll today with regard the Job Retention Scheme when dealing with zero hours contracts and therefore irregular hours. Whilst I can clearly see they are entitled to 80% of their average salary over the past 12 months the pro rata for this months is throwing up queries.
In particular I have a client who has furloughed all her staff as at 20 March. Do you pay them the difference of what they would have earned for the month (averaged over the past 12 months) less what they have already earned, or, do you work out the pro rata days average earning from 21st , if this is the case for some of the employees it will take their total salary for hours worked to 21st plus furloughed average from 21st to more than the average earnings for the past 12 months which does not seem right? For one employee they have received holiday pay this month which takes them over the average of the last 12 months so would they be entitled to anything.
I could do with some clarity on this one as I am at a loss and cannot find the answer anywhere else.
Thanks
Jane
”
Hi Jane,
For zero hours or irregular hours, the guidance is to use either the same month's earnings from the previous year or the average monthly earnings for the 2019-20 tax year (preferred).https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
With regards to holiday pay, that will be exceptional payment so shouldn't count in this case to take that employee over the average monthly earnings and it is Average, the employer will only be reclaiming the portion calculated for Furlough. Even with the CJRS, the employer could agree to a request for holiday pay from an employee to supplement their furloughed wage although with no revenue coming in, the employer might be inclined or advised to decline (cashflow).
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- Fellow
- Practice Licence
- 81 posts
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Armstrong said:
“
JC.BKS said:
“
Help I'm stuck
I am hoping you can help me clarify how to deal with payroll today with regard the Job Retention Scheme when dealing with zero hours contracts and therefore irregular hours. Whilst I can clearly see they are entitled to 80% of their average salary over the past 12 months the pro rata for this months is throwing up queries.
In particular I have a client who has furloughed all her staff as at 20 March. Do you pay them the difference of what they would have earned for the month (averaged over the past 12 months) less what they have already earned, or, do you work out the pro rata days average earning from 21st , if this is the case for some of the employees it will take their total salary for hours worked to 21st plus furloughed average from 21st to more than the average earnings for the past 12 months which does not seem right? For one employee they have received holiday pay this month which takes them over the average of the last 12 months so would they be entitled to anything.
I could do with some clarity on this one as I am at a loss and cannot find the answer anywhere else.
Thanks
Jane
”
Hi Jane,
For zero hours or irregular hours, the guidance is to use either the same month's earnings from the previous year or the average monthly earnings for the 2019-20 tax year (preferred).https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
With regards to holiday pay, that will be exceptional payment so shouldn't count in this case to take that employee over the average monthly earnings and it is Average, the employer will only be reclaiming the portion calculated for Furlough. Even with the CJRS, the employer could agree to a request for holiday pay from an employee to supplement their furloughed wage although with no revenue coming in, the employer might be inclined or advised to decline (cashflow).
”
Thanks for the reply and clarity on holiday pay. I was aware of the rest of the guidence but just concerned that I get it right first time and do not have to go back and resubmit March payroll.
Having watched ICB TV 5, it seems it is now confirmed that holiday pay is still to accrue over the Furloughed period, if this is the case I assume that when calculating the Furloughed pay that holiday pay for zero hours/irregular hours workers is not included in the equation otherwise they would be receiving holiday pay on top of holiday pay.
I am sure I am not alone in the confusion this is causing and there seems to be answers out there that clearly answer the questions right now.
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- Member PM.Dip
- Practice Licence
- 29 posts
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JC.BKS said:
“
Armstrong said:
“
JC.BKS said:
“
Help I'm stuck
I am hoping you can help me clarify how to deal with payroll today with regard the Job Retention Scheme when dealing with zero hours contracts and therefore irregular hours. Whilst I can clearly see they are entitled to 80% of their average salary over the past 12 months the pro rata for this months is throwing up queries.
In particular I have a client who has furloughed all her staff as at 20 March. Do you pay them the difference of what they would have earned for the month (averaged over the past 12 months) less what they have already earned, or, do you work out the pro rata days average earning from 21st , if this is the case for some of the employees it will take their total salary for hours worked to 21st plus furloughed average from 21st to more than the average earnings for the past 12 months which does not seem right? For one employee they have received holiday pay this month which takes them over the average of the last 12 months so would they be entitled to anything.
I could do with some clarity on this one as I am at a loss and cannot find the answer anywhere else.
Thanks
Jane
”
Hi Jane,
For zero hours or irregular hours, the guidance is to use either the same month's earnings from the previous year or the average monthly earnings for the 2019-20 tax year (preferred).https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
With regards to holiday pay, that will be exceptional payment so shouldn't count in this case to take that employee over the average monthly earnings and it is Average, the employer will only be reclaiming the portion calculated for Furlough. Even with the CJRS, the employer could agree to a request for holiday pay from an employee to supplement their furloughed wage although with no revenue coming in, the employer might be inclined or advised to decline (cashflow).
”
Thanks for the reply and clarity on holiday pay. I was aware of the rest of the guidence but just concerned that I get it right first time and do not have to go back and resubmit March payroll.
Having watched ICB TV 5, it seems it is now confirmed that holiday pay is still to accrue over the Furloughed period, if this is the case I assume that when calculating the Furloughed pay that holiday pay for zero hours/irregular hours workers is not included in the equation otherwise they would be receiving holiday pay on top of holiday pay.
I am sure I am not alone in the confusion this is causing and there seems to be answers out there that clearly answer the questions right now.
”
Hi Clair,
I'm not sure if I get you right but will try. When setting up holiday pay for zero/irregular hours workers I use the weekly averages to help determine holiday entitlement through the software (Sage 50 Payroll). Say in one week an employee was on holiday and didn't work if they were not accruing holiday on that pay holiday pay element their average will be down as a consequence and that will be true every time they were on holiday. Say an employee works 40 hours a week normally, if they didn't accrue holiday for 5.6 weeks (Annual Entitlement) then on the average it will appear as though their average was 35.69 a week. Since they are still employed then they are continuously accruing holiday. I take your point that if say they through an agreement with the employer got paid holiday pay even though they were working it skews the averages a little but it is averages and over the course of a year the difference will be negligible.
Hope this helps
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