A big virtual round of applause for payroll teams and bureaus up and down the country who have spent the past few weeks getting to grips with the evolving complexities of the Coronavirus Job Retention Scheme (CJRS).
April’s the busiest payroll month of the year anyway and, despite being one of the most important business functions, and one which affects every employee, payroll is one of those things that people rarely notice unless it goes wrong! Combine that with many payroll specialists working remotely for the first time, urgent demands for help from understandably stressed business owners and managers who are themselves under tremendous pressure and, suffice to say, it’s intense.
As a politician’s soundbite, the CJRS sounds straightforward “the Government will pay 80% of furloughed employees’ wages up to a maximum of £2,500 a month”. And, whilst the CJRS is a welcome relief for many thousands of businesses, working that all out can actually be really complicated.
Applying for a grant through the CJRS scheme isn’t processing payroll, it’s an application for state aid. The rules are different to ‘normal’ payroll conventions and legislation, and just because something doesn’t form part of the grant a company receives, doesn’t mean they aren’t obliged to pay it to their employees under employment law and their contracts.
As of 6.30 pm on 23 April, we were on the sixth set of updated HMRC guidance, even the HMRC calculator (when it eventually became available) didn’t agree with at least one of the worked examples and there remain apparent contradictions between the guidance and the legislation. Throw in dealing with salary sacrifice schemes, part-time workers, treatment of bank holidays and holidays on furlough, auto-enrolment (and non-auto enrolment) pensions, variable pay, new starters and leavers, the interaction with sick pay (and Covid19 related SSP which can be reclaimed under a different Government scheme), the employment allowance, differing furlough lengths, employers who may be topping up salary and deciding on furlough claim periods, and that ‘80% of furloughed wages calculation’ isn’t quite so simple any more.
The result in many cases is that the amounts paid out to employees based on assumptions of how the CJRS scheme was going to work, those which were paid out even before the scheme was announced and those paid out even when the scheme rules are fully clear, will be different to the reference pay on which the CJRS grant will be calculated.
Mention should also go to another group who are generally only in the news when they’ve not achieved something; the HMRC tech team who got the CJRS portal up and running (and functional) in record time, and had to cope with evolving rules, guidance and clarifications about how it would actually work. With no soft launch, it does seem to be coping pretty well with high volumes of claims and hopefully, payments will reach cash-strapped businesses soon. The requirement for claims of up to 100 employees to be entered manually on an individual basis does make this harder than it needs to be, but we live in hope that this might change as the scheme progresses.
For help on the CJRS scheme grant please get in touch with your usual Sagars contact who will work with our specialist team to assist you.