COVID-19 Weekly Round Up (w/e 18th April)
Here’s what you may have missed this week – make sure to check out my Covid-19 page for extra resources too.
There has been much confusion around agents and authorisation. The latest from ICAEW is here: it seems that if you haven’t activated agent online authorisation (AOA) as part of the 64-8 process – i.e. have only requested telephone/post support by submitting a 64-8 form – your client then can’t add PAYE to their online account as you are already shown as their agent, albeit not for online service which is what they need for a reclaim. We also need clarity on whether making a claim is allowed if the agent doesn’t have Anti-Money Laundering (AML) registration as it appears this is a regulated activity. This really should have been bottomed by now but I’m told we might know some more this Tuesday – not much help for clients expecting agents to prepare a claim tomorrow.
On Tuesday, HMRC updated the salary sacrifice guidance which regards COVID-19 as a lifestyle event. The Pensions Regulator (TPR) then put together some comprehensive guidance on Friday as it is vital that employers understand that you can’t further reduce the 80% furlough pay in respect of any sacrifice, or you will be in breach of the scheme rules for not paying 80% of pay. Here is their salary sacrifice guidance:
In response to the reclaim guidance published on Friday night, employee numbers are requested but are not validated so you can use any identifier that helps you to identify the employee. On our query about whether employee numbers or payroll IDs are needed for a reclaim, HMRC replied:
‘I think it’s deliberately ambiguous to allow for any, the field is included as an extra measure for identifying the employee so whatever reference serves that purpose best.’
The statutory residence test (SRT) was relaxed (as reflected in this letter) and introductory guidance for employers on the point-based immigration scheme was issued.
Tuesday was a good day for payroll software developers as we made some progress towards getting clarity on the data they might be able to provide you with to assist in the reclaim, and more guidance is due to be published on GOV.UK. We raised concerns about working days vs. calendar days: currently, for small (part period) furlough payments, the NICs threshold and pension threshold will mean no on cost funding and asking for a NINO as a mandatory field is inappropriate. There will be a calculator for employers to use to calculate reclaims but that may not be available by tomorrow.
That being said there has been no update from HMRC on the draft calculations for the reclaim that were first provided to software developers on Thursday 9th April.
- There was a relaxation of sorts as we should have now reported some earnings for the 19/20 tax year by 19th March 2020 – this will help some weekly payrolls and 4-weekly payrolls that cut off mid-March, but for any monthly payrolls that reported February starters in March they are still excluded, so it lead to some very odd decisions.
- If you have less than 100 employees, you’re being asked to key in data at employee level, whereas when reporting over 100+ furlough employees you can upload a file. We (as in the British Computer Society Payroll Specialist Group) met with HMRC and have asked if schemes with less than 100 employees could have an option to upload as well, as it is a massive workload for agents and employers – particularly if they run a weekly payroll and must therefore re-key the data each week.
I’ve had a few questions about the National Insurance calculation in the Coronavirus Job Retention Scheme (CJRS) reclaim. The pension and NIC thresholds are not pro-rated (they could have been as it’s nothing to do with legislation, but the argument will be that this was done for simplicity!). So if you have a monthly payroll and pro-rated furlough (and you ought to have for March as nobody could legitimately be furloughed all month) unless the furlough payment exceeds the NIC threshold of £719 and the pension threshold of £512, there will be no on cost reclaim for that month.
We also received more guidance on unusual scenarios and Statutory Parental Bereavement Pay – one to add to your policy documents whenever we get back to business as usual. Sadly, this is one to watch as we may need to use this new statutory payment more than we expected. Note that if somebody leaves your organisation after their child has died but has not taken their entitlement, you are required to reinstate them on the payroll to pay the one or two weeks of statutory leave. This is true even if they are no longer with you, as eligibility is retained for 56 weeks after the date of death and does not pass to the new employer.
On Friday the Chancellor extended the CJRS scheme until the 30th June 2020. And finally, just when we thought the week had come to an end, yet another iteration of the CJRS guidance was issued! The update section states the following:
‘New information added on scheme extension, fraud, claims for employees you made redundant or who stopped working for you, fixed term contracts, agency workers and retaining records. Also, a new guide has been published with information on holiday pay, employees returning from family-related statutory leave and sick pay, how to treat grant payments in Real Time Information. Plus, more information on how to calculate the claim for 80% of your employees’ wages, how much you can claim for National Insurance and pension contributions and how to claim’.
If you’re looking for updates, commentary and extra content as it happens, I’ve started sending a daily Covid-19 update email as well as keeping my resources page as up to date as possible – drop me a message if you’d like to be added to the mailing list.