Furlough with yearly RTI submissions

[andydd68]

Oh, holiday pay, really?

Feel free to use the CJRS calculator if you want to. I kinda hope the typical contractor co. on minimum salary wouldn't be needing a web app to multiply by 0.8!

Fwiw, it gave me the wrong answer when I tried. HMRC instruction at the time was not to use it for annual scheme (didn't stop me trying though), that's not to say it hasn't been fixed since.



OK I see, so if your RTI submission is between 20th March and 5th April, then it misses the 19 March deadline and the previous payment would have been in the 2018/19 tax year.

For anyone affected by this it could still be worth pursuing. My accountant advised that some other of their clients had needed to call HMRC (only now I understand why) implying that it was being treated as a technical issue that could be sorted out over the phone.

The HMRC calc does ask lots of questions but the main part of it is, it asks what you earnt in the same period one year ago and also the whole amount over the last 12 years, which it divides by 12 and chooses the greater.

Yeah holiday pay does have an effect as does weekends and bank holidays (Xero for example asks you to choose their No bank holiday settings), I expect for most of us here it has no effect but it could do if you are someone who regularly works weekends and/or bank hols.

I think Martin Lewis did a bit on annual RI submissions ?, I read a good piece somewhere but cant find it now

[Contreras]

It IS more complex than that..as it takes into account holiday pay, the initial calculation used by Xero was incorrect so they then had to put together a how to guide to remedy it, HMRC have just added a feature if youve been overpaid CJRS but it seems nothing if you underclaimed. Ive just used the HMRC Calculator and it seems to work fine for annual pay.

Oh, holiday pay, really?

Feel free to use the CJRS calculator if you want to. I kinda hope the typical contractor co. on minimum salary wouldn't be needing a web app to multiply by 0.8!

Fwiw, it gave me the wrong answer when I tried. HMRC instruction at the time was not to use it for annual scheme (didn't stop me trying though), that's not to say it hasn't been fixed since.

"for an employee (including a director) to qualify for the scheme, they must have been on the payroll at 19 March 2020 and have received a payment in the 2019/20 tax year. "

OK I see, so if your RTI submission is between 20th March and 5th April, then it misses the 19 March deadline and the previous payment would have been in the 2018/19 tax year.

For anyone affected by this it could still be worth pursuing. My accountant advised that some other of their clients had needed to call HMRC (only now I understand why) implying that it was being treated as a technical issue that could be sorted out over the phone.

[andydd68]

The CJRS calculator does not work for annual salary. It probably doesn't work for director's NI either.

But assuming no NI then it's hardly rocket science, just divide annual salary by 12 and multiply by 0.8. Part-months are based on the number of days in that month.



Except that doesn't make sense. Others here (it seems), and certainly in my case, have had no issues despite genuinely being on the Annual Scheme.

The only plausible reasons for a rejection that I can think of are: nil monthly PAYE submission in Feb, or in the first year of annual PAYE with no submission yet.

It IS more complex than that..as it takes into account holiday pay, the initial calculation used by Xero was incorrect so they then had to put together a how to guide to remedy it, HMRC have just added a feature if youve been overpaid CJRS but it seems nothing if you underclaimed. Ive just used the HMRC Calculator and it seems to work fine for annual pay.

This page deals with the annual pay cut-off issue - "Firstly, many directors in small owner-managed businesses have their salary paid on an annual basis. The Treasury Direction of 15 April requires that, for an employee (including a director) to qualify for the scheme, they must have been on the payroll at 19 March 2020 and have received a payment in the 2019/20 tax year. This means that a payment to the director must have been notified to HMRC via RTI on or before 19 March 2020. In practice, many annual salaries will not have been run by that date, so these directors will be unable to claim under the scheme."

COVID-19: Job Retention Scheme - details for employers | The Association of Taxation Technicians

[Contreras]

... you will also need to use the CJRS calculator to work out 80% monthly pay..

The CJRS calculator does not work for annual salary. It probably doesn't work for director's NI either.

But assuming no NI then it's hardly rocket science, just divide annual salary by 12 and multiply by 0.8. Part-months are based on the number of days in that month.

*There was a article somewhere that did point out that some with annual salary couldnt furlough as they just missed the march 2020 deadline (this was refering to a true annual pay of just one payment per year not 11 lots of nil and then a single payment)

Except that doesn't make sense. Others here (it seems), and certainly in my case, have had no issues despite genuinely being on the Annual Scheme.

The only plausible reasons for a rejection that I can think of are: nil monthly PAYE submission in Feb, or in the first year of annual PAYE with no submission yet.

[andydd68]

Thanks for these comments.

The exact phrase my accountant used was that the "HMRC system cannot cope with a yearly salary on furlough".

Your comments have prompted me to challenge exactly what this means. I still doubt that I'll apply. I'm inclined to put furlough for limited company directors in the "too good to be true" bucket particularly when I've been fortunate in only having one month where I've invoiced zero.

Clearly some are taking a different approach. I spoke to one contractor today in a similar line of work who has furloughed himself, his wife and his mother.

Yes it can, you can do Furlough with annual salary, its mostly irrelevant to HMRC, all they check is that you had PAYE RTI submission before March 2020, you will also need to use the CJRS calculator to work out 80% monthly pay..although this calculation is separate to your CJRS claim.

Seems to be a lot of posts recently where accountants give duff advice.

*There was a article somewhere that did point out that some with annual salary couldnt furlough as they just missed the march 2020 deadline (this was refering to a true annual pay of just one payment per year not 11 lots of nil and then a single payment)

[sludgesurfer]

Thanks for these comments.

The exact phrase my accountant used was that the "HMRC system cannot cope with a yearly salary on furlough".

Your comments have prompted me to challenge exactly what this means. I still doubt that I'll apply. I'm inclined to put furlough for limited company directors in the "too good to be true" bucket particularly when I've been fortunate in only having one month where I've invoiced zero.

Clearly some are taking a different approach. I spoke to one contractor today in a similar line of work who has furloughed himself, his wife and his mother.

[FK1]

Either yourco is on PAYE monthly, quarterly or annual scheme.

To be on the Annual Scheme you must have notified HMRC of this (and it must apply to all employees of the company) and then you will do a single RTI submission in whichever month you elect to have the salary paid. There will be no nil submissions.

This then by definition will fall within March 2019 - Feb 2020 and therefore qualify for CJRS.

If your accountant is reporting nil monthly and one big payment at year end, then it's not yearly RTI.

Spot on. I am on the Annual Scheme for years. Report the annual salary in April 2020 and have no problem with CJRS so far claiming 3 weeks the third time.

[andydd68]

Either yourco is on PAYE monthly, quarterly or annual scheme.

To be on the Annual Scheme you must have notified HMRC of this (and it must apply to all employees of the company) and then you will do a single RTI submission in whichever month you elect to have the salary paid. There will be no nil submissions.

This then by definition will fall within March 2019 - Feb 2020 and therefore qualify for CJRS.

If your accountant is reporting nil monthly and one big payment at year end, then it's not yearly RTI.

Yes that makes sense, I do my own accounts and could if I wanted pay nil months, pay double in one or as suggested pay 11 at nil then one annual amount at the end but its still a monthly scheme.

[Contreras]

Either yourco is on PAYE monthly, quarterly or annual scheme.

To be on the Annual Scheme you must have notified HMRC of this (and it must apply to all employees of the company) and then you will do a single RTI submission in whichever month you elect to have the salary paid. There will be no nil submissions.

This then by definition will fall within March 2019 - Feb 2020 and therefore qualify for CJRS.

If your accountant is reporting nil monthly and one big payment at year end, then it's not yearly RTI.

[sludgesurfer]

Similar story to the OP.

I was benched in May with a letter from both clients saying this was due to projects being postponed due to corona. I e-mailed the accountant about potentially furloughing myself. He said with annual payroll submissions at year end, there was no March payment to reference and as such I fell through an administrative crack in the system. He said HMRC were looking into this but not to hold my breath.

For me it wasn't a big deal and I'm not sure if I would have gone ahead with it anyway but this does appear to be a genuine fault with the system.

I don't know whether my accountant tried the 'hack' quoted above but his message to me was very much that applying for furlough with annual submissions at year end wouldn't work.

[FK1]

The RTI submission would of needed to be before March 19th

yearly RTI submissions means it is done once in a year and other 11 months are reported as no payments to employees. So effectively March is covered. I think it is a new Payroll year thing that need to be set and send via the tool. At least it works in my case with my annual payment.

[andydd68]

Hi,

I'm currently trying to Furlough myself under my limited company but the HMRC site states that I'm not eligible as there is no body listed on the payroll, I have been on the payroll for the last 8 years and this shows under the HMRC basic tools app I use to make submissions. I currently make yearly RTI submissions rather than monthly, the last submission made was in March 202) and the is reflected on the HMRC portal. Does anyone have experience of this issue and any advice on what I need to do to qualify? I've been trying to get through to HMRC for a while but the line drops as they are too busy.

TIA,
Mark

The RTI submission would of needed to be before March 19th

[FK1]

Hi,

I'm currently trying to Furlough myself under my limited company but the HMRC site states that I'm not eligible as there is no body listed on the payroll, I have been on the payroll for the last 8 years and this shows under the HMRC basic tools app I use to make submissions. I currently make yearly RTI submissions rather than monthly, the last submission made was in March 202) and the is reflected on the HMRC portal. Does anyone have experience of this issue and any advice on what I need to do to qualify? I've been trying to get through to HMRC for a while but the line drops as they are too busy.

TIA,
Mark

I do that. HMRC basic tools. Annual salary paid once in a year and that month RTI. All other months marked as no payment to employees. I think you need just to open a new year in your HMRC basic tools and RTI your salary in this year. In my case I paid that annual salary in a new year April and receive a very small Furlough payment but I believe it is fair.

[camps]

Hi,

I'm currently trying to Furlough myself under my limited company but the HMRC site states that I'm not eligible as there is no body listed on the payroll, I have been on the payroll for the last 8 years and this shows under the HMRC basic tools app I use to make submissions. I currently make yearly RTI submissions rather than monthly, the last submission made was in March 202) and the is reflected on the HMRC portal. Does anyone have experience of this issue and any advice on what I need to do to qualify? I've been trying to get through to HMRC for a while but the line drops as they are too busy.

TIA,
Mark