Update to CJRS claim calculations guidance 15 September 2020
HMRC has updated guidance on specific calculations in relation to claims made under the Coronavirus Job Retention Scheme (CJRS).
Where an employee is taken off furlough or flexible furlough part way through a claim period, their employer should only calculate the amount to be paid on the basis of the days that the employee was on furlough. This is true even if the employer has to claim through the service for a longer period in order to align their claims.
HMRC has additionally confirmed that employers who have historically used this calculation will not need to adjust their previous claims but should use the new calculation process going forward.
The below example is provided on the guidance page:
“Employee has a calendar month pay period and usually works 40 hours per week. The employee was paid £2,000 in the last full monthly pay period before 19 March 2020. The employee was furloughed continuously from 13 April to 30 June. They are flexibly furloughed from 1 July, working 10 hours per week. The flexible furlough agreement ends on 12 July and the employee returns to work their full usual hours from 13 July.
The employer works out 80% of the employee’s wage:
1. Start with £2,000 (employee’s wages) 2. Divide by 31 (the total number of days in July) 3. Multiply by 12 (the number of furlough days in July) 4. Multiply by 80% - which is £619.35
The employer should disregard any usual hours, working hours and furloughed hours after 12 July because the employee is no longer furloughed after that date, even if the employer has to claim for a longer period such as 1 - 31 July (for example to align claim periods when claiming for multiple employees).”
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Arrests made in £70,000 furlough fraud investigation 16 September 2020
A 43 year-old male accountant, from Romford and a 51 year-old female company director from Walthamstow have both been arrested on suspicion of fraud by false representation and money laundering. The accountant was also accused of fraud by abuse of position. The arrests were made in connection with fraud relating to the Coronavirus Job Retention Scheme (CJRS) equalling £70,000. Both individuals have since been released under investigation, but devices and business records have been retained by police.
Personnel Today reported that the assistant director of the Fraud Investigation Service at HMRC, Terry Braithwaite, commented:
“The CJRS is part of the collective national effort to protect jobs. While most employers have used the scheme responsibly, this is taxpayers’ money and HMRC will not hesitate to act on reports of abuse of the scheme.”
The Chief Executive and Permanent Secretary of HMRC, Jim Harra, confirmed that it is expected that anything up to £3.6 billion in furlough payments have been claimed either erroneously or fraudulently, and that HMRC is currently investigating 27,000 cases where it is thought that too much money has been claimed by businesses. Statistics reveal
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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