How to claim
You can only claim for periods when your employee was on furlough.
You cannot make more than one claim during a claim period – you should make your claim shortly before or during running payroll.
You must claim for all employees in each period at one time – you cannot make changes to your claim.
You can make your claim in anticipation of an imminent payroll run, at the point you run your payroll or after you have run your payroll . Claims can be backdated from 1 March 2020 where employees have already been furloughed from that date. A claim cannot start any earlier than the date the employee was first furloughed.
You must pay the full amount you are claiming to your employee, even if your company is in administration. If you’re not able to do that, you’ll need to repay the money back to HMRC. The same applies in relation to employer national insurance contributions and pension contributions you claim regarding your employee. The full amount you claim in respect of these must be paid or you will need to repay the money back to HMRC.
By making a claim, you agree that:
- the grant you receive can only be used to pay your employee’s salary and the employer national insurance contributions and pension contributions you must pay in relation to the salary paid to your employee
- you will return any grants back to HMRC immediately if you’re unwilling or unable to use it to pay your employee’s salary and the employer national insurance contributions and pension contributions
You must not make the claim if you do not accept that you can only use the money you claim for making those payments and that it must be returned to HMRC if you do not.
After you’ve claimed
HMRC will check your claim, and if you’re eligible, pay it to you by BACS to a UK bank account.
You must pay the employee all the grant you receive for their gross pay in the form of money.
Furloughed staff must receive no less than 80% of their reference pay (up to the monthly cap of £2500).
Employers cannot enter into any transaction with the worker which reduces the wages below this amount. This includes any administration charge, fees or other costs in connection with the employment.
When the government ends the scheme
When the government ends the scheme, you must make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).
Tax Treatment of the Coronavirus Job Retention Grant
Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.
Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.
Individuals with employees that are not employed as part of a business (such as nannies or other domestic staff) are not taxable on grants received under the scheme. Domestic staff are subject to Income Tax and National Insurance Contributions on their wages as normal.
You must report the amount of grant you receive and pay to an employee through RTI, in the same way you would report their normal pay.
You should make RTI submissions on or before the date you pay your employee.
Where employers have continued to pay employees during a period of furlough, in advance of receiving any payments under the scheme, they do not need to make any further RTI submissions when they receive the grant that reimburses those payments made in advance.