Flexible Furlough Scheme
The CJRS has been running since March and from 1st July, the Flexible Furlough scheme has been introduced, so that employees can work part time, if requested.
For employers, this a good way to ease out of the lockdown by bringing staff back to work on a part time basis.
Prior to starting the Flexible Furlough scheme from July, the employee needs to be informed that they are required to work part time and they will still receive their 80% gross salary. The business will pay the hours the employee works and claim back the hours the employee doesn’t work. Hours need to be agreed and tracked. Consider the impact of holiday, sickness and possible maternity pay whilst on furlough.
From 1st August employers will need to pay all the employers NI and pension. In September, the furlough claim will be reduced to 70% and 60% in October.
HMRC will be checking claims over an extended period. If your business has an annual audit, the CJRS claims will be audited.
Check with your accountant or bookkeeper, furlough claims are to be shown as income in the accounts. For tax purposes, this is offset against payroll costs.
Your accounting software will need new nominal codes set up, to show the furlough claims.
Make use of the HMRC guidelines and take advantage of their calculation’s calculator
https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme#calc Print the results as your backup.
You will also find information here on employees taking holiday, maternity, paternity and statutory sick pay.
Ensure that you have clear workings for each pay period and keep your claims and evidence for six years, for audit and HMRC.
If you make an error in the submission to HMRC you can correct it. Just offset the error on the next submission.
Benefits of Getting it right!
If your claims are correct, you will save your auditor and HMRC staff, time (if they check it) and your business the additional costs and related HMRC fines. You will also have nothing to worry about.
If you require further advice or assistance, please contact us, firstname.lastname@example.org or 01223 294732.
Francesca and Chris