COVID-19: Payroll; Employees and HMRC: Interesting Things We Have Learnt This Week (W/C 31st March, 2020)

We have been busy attending webinars and reading up on the new and changing guidelines with relation to small businesses and self-employed individuals this week. We thought it would be helpful to note some of the items we have found interesting (as a small business ourselves):

  • If you are applying for a grant made available because of COVID-19 we recommend that you download the corresponding guidance from the Government website. The guidelines are constantly changing so this gives proof that what you have done was correct at the time.
  • Through the Coronavirus Job Retention Scheme you are able to recover £2,500 of the employee's gross salary, the employers National Insurance and employers pension costs (minimum auto enrollment scheme) is in addition. 
  • Employees keep all employment rights.
  • All employees can be furloughed if eligible. Eligibility:
    • if they were on PAYE payroll on 28th February, 2020
    • employees on unpaid leave are NOT eligible
    • no work is to be done under their contract that provides services or generates revenue
    • employees can undertake voluntary work as long as it does not provide revenue for the company they have been furloughed from
    • employees can work a second job and be furloughed from the first job
    • minimum furlough leave is 3 weeks
    • the furlough must be justified
  • An employer must confirm an employee has been furloughed in writing, they must pay the furloughed employee, declare it to HMRC and remit to HMRC
  • Although the scheme portal is not yet available, you can prepare for reclaiming now as certain information is already known to be needed:
    • employee name
    • employee telephone number
    • PAYE reference number
    • UK bank details
  • Governing bodies are advising employers to be aware of possible compliance checks after this terrible period, HMRC could use this as a vehicle to reintroduce these and if any irregularities are found the grant will be recalled BUT this is just hearsay for now
  • Only way commission can be paid to a furloughed employee is if that is their only pay
  • Bonuses are a difficult subject but it is thought that if a bonus is contractual it is likely to be allowable
  • An employer CAN demand an employee takes holiday instead of furloughing them as long as it is within the notice of the holiday rules, employee contracts should always be checked before an employer makes a decision
  • Being on social media as a company is interpreted as working for a director as it has an effect on future revenue


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