HMRC launches online portal for the Coronavirus Job Retention Scheme
Key Contact – Claire Knowles
Author – Adam Mcglynn
The long-awaited day is here. As of 20 April employers are able to access funds from the Coronavirus Job Retention Scheme (the Scheme) to reimburse wage costs for employees placed on furlough leave. Accompanying the launch has been a new step by step guide publications available HERE. Below we have set out some of the key points to note following this new guidance and user experiences from the Scheme’s first day.
- Due to the high volume of submissions there are a number of restrictions to ensure the system can handle the demand. Only one claim can be made per PAYE scheme, per claim period (per month), and the application can only be made in one session. The session has no save/return options and will time out after 30 minutes of inactivity. Perhaps the most important guidance is to ensure all details and calculations are prepared in advance and the individual preparing the submission has an uninterrupted period of capacity. If you have any questions which you would like answered before submitting your application we recommend contacting either us or your accountants in advance, depending on the query.
- Be thorough and double check everything. There does not appear to be a system in place for rectifying mistakes at this time and the applicant is responsible for the accuracy of the claim. HMRC have also, unsurprisingly, warned that they will be inundated with calls for the foreseeable future and so only emergency calls will be taken. It is unclear what HMRC would consider an emergency and whether they would be able to rectify certain mistakes, however, it would be preferable to avoid this by ensuring you are fully prepared at the outset and approach the claim systematically and meticulously.
- The portal can be accessed on GOV.UK using your government gateway ID and password and PAYE details. So far the portal has been restricting access to control concurrent applicants to keep the system stable. If you have been unsuccessful in accessing the portal so far do not panic. We know that people have been accessing the system and that it seems to temporarily limit users.
- If the business is claiming for 100 or more employees they must submit an excel spreadsheet or similar document to present this data. If the employer is claiming for 99 or less employees, however, this must be entered manually. For the 100+ claims it is vital that this document is prepared prior to starting the submission. Equally, for those with a large number of furloughed workers, but less than 100, remember that these will need to be entered manually and will be quite laborious. Set out a well organised process for completing the application and be thorough.
- Calculations in HMRC’s step by step guidance suggest that calculations are done on a calendar day basis and not a working day basis. There is an ongoing debate within the accounting community as to how calculations should be made as the guidance’s calendar day method could arguably detriment part time workers and employees who do not work on weekends. The risk here may be that there is a difference between the amount owed to the employee and the amount which can be claimed from HMRC. HMRC may have opted to use calendar days for claim entitlement calculations in the interest of speed and simplicity, however, this would not affect the amount owed to an employee under their employment contract (as varied by a furlough agreement). If the employee still needs to be paid a certain amount based on working days it may be that the difference is not recoverable, either because it exceeds the amount calculated using HMRC’s calendar day method or because it is lower that this amount but would not be paid to the employee in any event and is therefore not recoverable. Unfortunately, this is no current answer here but we will continue to request further guidance.
- Businesses making their first submission can claim for March’s entitlement at the same time as claiming for April.
- There is currently a huge rush of businesses trying to make claims. The guidance states that money is expected to be paid within six working days into the bank account provided. Once the funds enter the business’ account that money is theirs, save any salary payments that were dependant on receipt of these moneys. If this money is needed this month employers should look to make their submissions in good time, however, there is no difference in entitlement between making a claim now or in a week’s time.
- There have been reports that some of the questions are worded quite ambiguously. Please make sure you read through the application thoroughly. Additionally, and in particular, users have found that the calculator has been providing erroneous results. It is recommended that employers are clear on their calculations beforehand and consult an accountant if concerned.
- In the interest of speed some of the system seems to rely on trust. For example, there is no need to wait 3 weeks before claiming or prove an employee is not working. However, certain evidence is needed and there is nothing to stop HMRC doing enhanced retrospective checks once the initial rush has slowed down. It is important therefore to organise all required evidence in advance and keep it secure.
Generally speaking, legal and accountancy professionals seem pleasantly surprised with the online system and its ease of use. Its launch is certainly a relief for businesses across the country. As frantic fire-fighting and crisis aversion begins to wane over the coming weeks and months employers can look to other employment matters such as ongoing grievance and disciplinary processes which may have been delayed, organising efficient use of annual leave during furlough, and deciding who can be brought back to work in July. Perhaps this period will even be a catalyst for more drastic change – perhaps working from home and other new norms are more practical and cost effective than anticipated. Our employment team at Acuity are here to help.
Claire Knowles – Partner
Mark Alaszewski – Associate
Rebecca Mahon – Solicitor
Adam McGlynn – Trainee Solicitor