The government has updated its guidance on the Coronavirus Job Retention Scheme (“CJRS“) with UK currently going through its third lockdown. Current Government guidance is available on their website.
Our London Tax Solicitors and Barristers have vast experience of tax laws and first hand commercial, litigation and advocacy experience. We have a proven track record of successfully contesting disputed tax assessments and penalties with HMRC. The tax authorities have lost many cases that are appealed through negotiation, internal review or through the Tax Tribunal.
What are the main changes?
The government has updated the CJRS guidance to state that employers can furlough employees who have caring responsibilities including caring for children who are at home as a result of school and childcare facilities closing and caring for vulnerable individuals in their household.
Deadlines and publishing claims
Monthly deadlines for claims must be now met unless an employer has a ‘reasonable excuse’ for a late claim; the next deadline is 15 February 2021. In addition to the above, HMRC intends to publish a list of the names of employers who have claimed under the scheme since 1 December 2020 on 26 January 2021, and from February HMRC will publish employer names, company numbers and the band of claim value every month.
Any applications by employers who wish to be excluded from publication the procedure for doing so has now been added to the guidance and must be made as soon as possible. HMRC will not publish details of employers if they can show that publicising these would result in a serious risk of violence or intimidation to certain relevant individuals, or any individual living with them. For more information see this link.
What is the Coronavirus Job Retention Scheme?
The legal framework for the Scheme was set out in a Treasury Direction on 15 April, a legally-binding order from the Treasury to HMRC. The purpose of the Scheme is to reimburse employers for the cost of furloughing employees “arising from the health, social and economic emergency in the United Kingdom resulting from coronavirus and coronavirus disease.” HMRC guidance on the Scheme has been expanded and republished a number of times since it was first launched:
- The original scheme introduced in March 2020;
- The flexible CJRS, which came into force on 1 July 2020; and
- the extended CJRS which took effect on 1 November 2020 and which is due to end on 30 April 2021.
What does ‘furlough’ mean?
Furlough basically means temporary leave of absence. The purpose of the CJRS is to ensure that employees are not made redundant and to incentivise employers to retain employees on paid temporary leave. The Government has been subsidising the earnings of furloughed employees under the CJRS (initially up to 80% of earnings, capped at £2,500 per month per employee) and these monies are not repayable.
How do you make a claim?
HMRC have helpfully laid out a step-by-step guidance below:
Step Two: Decide who will claim
You can make your own claim, or ask your agent to act on your behalf.
You (or your agent) will need to be registered for PAYE online to make a claim.
Step 3: Get ready to make your claim
To make your claim you’ll need to give information about your business and employees, including:
- employer UK, Isle of Man, or Channel Island bank account number and sort code
- employer PAYE scheme reference number
- number of employees being furloughed
- National Insurance number for each employee
- start and end date of the claim
- Corporation Tax unique taxpayer reference, Self Assessment unique taxpayer reference (find your UTR if you don’t know it), or company registration number. If you don’t have any of these, you can enter your Employer Name instead.
You should include all of the employees you want to furlough for that claim period. You won’t be able to make another claim for the same period and claim periods cannot overlap.
Step 4: Calculate your claim
For the majority of employers with full-time or part-time employees on a set salary, you’ll need to work out the total amount being paid to furloughed employees.
Please read the guidance on steps to take before calculating your claim for furloughed and flexibly furloughed employees. This gives examples to show how to calculate a claim, and a calculator that can work out most fixed or variable pay calculations. It’s your responsibility to check that the amount you’re claiming for is correct, even if you use a calculator.
Step 5: Make your claim
Make sure you have your Government Gateway user ID and password that you received when you registered for PAYE online. If you’re claiming for 100 or more furloughed employees, please use our template to upload your employees’ details to help you make sure your data is right. You need to make sure you use the right format
when entering the details on the template, or it may be automatically rejected when you submit it – read the guidance on using a template to claim for 100 or more employees.
Please only provide the information requested. If you provide less or more information you may be asked to submit it again, or risk delaying your payment. You can save and return at any point during your claim. So if you don’t have all the information you need
to complete a claim first time, or you want to take a break during a claim, you can save it and come back later. Also, you can delete a claim within 72 hours of starting it.
Remember claims have monthly deadlines and they must be submitted within 14 calendar days of the month they relate to, unless this falls on a weekend and then it is the next working day. Use our online service to make a claim
Step 6: After you’ve claimed
A claim reference number will be shown on screen once you’ve submitted your claim. Please print or note down the reference number, as you won’t get an email confirmation.
If you’re using an agent, ask them to note down the claim reference number and share the calculations that form the basis for your claim. To make sure employees’ wages are correctly reported to HMRC, please check if you need to report payments on the PAYE Real Time Information system. Read the guidance on reporting employees wages to HMRC when you’ve claimed through the Coronavirus Job Retention Scheme. HMRC will verify your claim and may need to contact you for further information. You will receive the grant in six working days.
If you have not claimed enough support, you have 28 days after the end of each month to contact HMRC and adjust your claim (if this falls on a weekend or a bank holiday, it would then be the next working day).
Step 7: Making additional claims
For your next claim period please return to Step 3, but remember your claim periods cannot overlap.
Please also check your calculations every time you make a new claim, in case any details have changed. You will only be able to increase the amount of your claim if you amend it within 28 calendar days after the month the claim relates to (if this falls on a weekend or a bank holiday, it would then be the next working day).
Expert London Tax Investigation Lawyers
If you need HMRC Tax Investigation advice, we are available to aid you at every stage of the HMRC investigate process. Members of our legal team have first-hand experience and knowledge of the internal workings of HMRC. We can provide you with the very best representation in negotiations with HMRC and defending all forms of HMRC fraud, tax inquiry, tax fraud investigation, criminal tax evasion and HMRC enquiries and investigations. Our team specialises in successfully challenging HMRC decisions and will assist you in every aspect of the investigation.
Our specialist Tax Solicitors and Barristers deliver expert technical knowledge, strong negotiation skills and respected advice, which can make a pronounced difference to eventual tax penalties, charges and liability.
Want legal advice from Tax Solicitors on your case?
Our simple enquiry form goes immediately to our tax litigators in Middle Temple, London. Call us on +442071830529 from 9am-6pm.