Accura Accountants – update
I have received a number of emails and phone calls to ascertain whether owner/sole directors of companies can make a claim under the new Government proposals which appear to directly apply to “Furloughed” staff.
My initial question and concern was – how does a director lay themselves off and how do they decide when to return to work. If during that period of “lay off” they still maintain the momentum of obtaining business for the future, technically are they still working?
The entire offer of assistance has definitely not been well thought out clearly for the number of people working via a small/medium sized Limited company.
My opinion is that every claim will be subject to HMRC review and recent comments emanating about the claims under “Job Retention Scheme” appear to encourage claims from such employees.
I suggest a claim is made and it is better to claim than not, however I make this comment based on my reservations noted above.
Please note that we still await full clarification and the opening of the HMRC portal to make formal claims and no doubt in the next few weeks more information will be provided.
I believe everybody is aware of the principle rules but I repeat for clarity.
- Staff furloughed should not work for the business.
- Income claimable is based on 80% of £2,500 per month i.e. £2,000 per month.
- The gross figure of £2,500 should be incorporated onto normal PAYE returns/ RTI and paid as is normal. Deductions to 5th of month and payable by the 19th of each month.
- If employee earns more than the £2,500 per month the employer is not obliged to pay the balance. The option is on the employer, always subject to prevailing union or other obligations, yet to be clarified.
- I refer clients to my original calculations as to tax and National Insurance. I believe and will be verifying that HMRC may not collect/ pay the National Insurance on employers during Furloughed periods. Presently, a maximum of 3 months from 1st March, ending currently 31st May 2020, but again Government legislation could change.
- As I have reported previously, the portal is NOT yet open and operating and obviously when operating may well have teething problems as it cannot be stress tested before going live.
- I have requested from each client that Accura Accountants deals with their wages (weekly or monthly) to advise our office of full details of employees that have or possibly will be furloughed. We require dates and income details, especially if being capped at 80%.
If Accura Accountants do not deal with your wage declarations, if assistance is required, not only do we need a copy of your last RTI submission say 28th February 2020, but full details of all staff and their role in business.
I repeat that as yet the portal is not open, so please do not call or email asking when one can submit a claim as we all await the details.
- One point that is very confusing is who pays the staff?
The answer is you the employer and then you will reclaim the capped figure thereafter. The grants may not be available until possibly late May or June. I am only repeating what is in the media. Until the portal is up and running, nobody can forecast the exact mechanics.
I end this mail by just stating the obvious
Instructions are slow to appear and not properly thought out in respect of many SME (Small Business Enterprises) of which circa 90% or more make up the UK economy. Please note that without a doubt HMRC could well place obstacles in front of claims if compliance is NOT adhered to, this includes VAT and PAYE submission etc.
I do look forward to meeting you all after this terrible saga and remember keep focused. We will all get through this.