We have just received an update from HMRC regarding the coronavirus job retention scheme and the application process. This will affect all employers with furloughed employees and any directors who have or are considering furloughing themselves.
HMRC have announced that the application process and portal will go live on the 20th April. So, from this date businesses will be able to apply for the furloughed employee grants.
We have summarised the key points from the update below;
In Order to Make A Claim You Must;
- Have created and started a PAYE payroll scheme on or before 28 February 2020:
- Be enrolled for PAYE online – this can take up to 10 days: and
- Have a UK bank account.
How Do I Know if I’ve Enrolled for PAYE Online?
It’s important to remember that even if you have been making payroll submissions for several years, you might not necessarily have a PAYE online account, this is often the case for ‘director only’ PAYE schemes.
HMRC have confirmed that if we are your authorised agents, we will be able to apply on your behalf. To confirm if you have been registered for PAYE online or if we authorised agent status please get in touch with your usual Williamson & Croft contact or email our payroll department at email@example.com
If we are not your authorised agents, we will apply f or this today and a letter with a code will be sent to the businesses HMRC PAYE address. You will need to provide us with this activation code. In addition, we are recommending that the business also creates its own PAYE online account, follow the link below and select create sign in details. Our payroll department can assist with this process and provide the PAYE and Accounts office reference which you will need.
HMRC guidance confirms our understanding that directors, including those who are directors of their own personal service company, can be furloughed.
It is important to remember that if you are furloughed you shouldn’t be working unless you need to carry out specific duties to fulfil your statutory obligations (e.g. filing the company accounts and other duties imposed by the Companies Act). The guidance from HMRC states, ‘furloughed directors should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provide services to or on behalf of their company’.
Tax Consequences of The Grant
The grant paid to you is subject to tax, it is included within the business taxable profits for income tax or corporation tax purposes. The salary payments and associated NIC and pension costs continue to be tax-deductible in the usual way.
As always, if you would like any further information on your options or any of the other changes announced, please get in touch with us. Feel free to contact our offices on 0161 399 0121 / 0151 303 3112 or by email firstname.lastname@example.org
Stay safe and kind regards,
Williamson & Croft LLP