An update on recent HMRC engagement from the Chair of the BASDA Payroll, Pensions & HR SIG – Pauline Green

Update as at 11th June 2020

Furlough has now been extended beyond 30th June and from 1st July there is no longer a requirement to set it as a 3 week minimum as long as the employee has previously been furloughed prior to 30th June. It can now be for as a minimum of 1 week. The exception to this is for employees who have been on maternity or paternity leave. They can be furlough even if they have not previously been furlough.

There is also a cap on the number of employees you can make the claim for in a period. You cannot claim for  more than you have in a previous period  (e.g. March 25 employees, April 35 employees &  May 30 employees means that the maximum number from July onwards is capped at 35 employees).

Updated guidance was issued on Friday, 12th June to the software community and was focused on requirements for July and August.  If you have not already signed up for email updates from HMRC please email: SDSTeam@hmrc.gov.uk to be added to their mailing list.

HMRC are moving towards more flexible furloughing as the charges become applicable, therefore it can be expected that the guidance will change month on month and BASDA will continue to engage with HMRC to represent and champion member challenges.  HMRC are working on a calendar month now and employers that have different pay frequencies (such as weekly) now must process their claim by calendar month.

HMRC will be restricting the time a claim can be made due to the change to a more flexible scheme therefore any June furlough claims will need to be claimed by end of July. BASDA have asked for further guidance on pro-rata for part-time employers.

It should be noted that if there have been any errors in prior claims (e.g. inadvertently over claimed) the employer can now inform HMRC and make an adjustment to their future claims to reflect this.

In addition to the updates from HMRC related to the Job Retention Scheme TPR have also updated their guidance which can be found HERE

A recent announcement from HMRC on Furlough has indicated that they have tweaked the furlough upload file for > 100+ employees.  The ask for the upload file to be available for those below 100 continues to feature on their agenda and BASDA are involved in these discussions. In addition, BASDA have been involved in the discussions on the NIC’s calculations on the HMRC calculator being incorrect. It has potentially been allowing a claim to be more than 13.8%. HMRC currently revising it and but it has not been released as yet.  There are no general requirements to make changes so if clients have overclaimed they are not at the moment looking to have it repaid. This may change in the future. Currently, If you have made a mis-claim there is not a way to make adjustment. The ability to make corrections is still being discussed and BASDA are part of that conversation.  Still waiting on the full announcement from the Chancellor as to what the 1st August changes will be.

SSP COVID-19 claim portal went live last week.  It is a straightforward and simple process.  The lessons learned from CJRS were adapted and HMRC implemented from that.  It was confirmed that you can put in separate claims, so each frequency can be submitted individually ( e.g. a weekly and a monthly submission), unlike the CJRS which has to combine into one claim per period, per PAYE scheme.  Agents can do a submission on behalf of their clients. It is not open to self-employed claimants.

Deadlines for P60 / P11D: is 31^st May.  There is no planned extension to this deadline but HRMC have advised that COVID-19 will be accepted as a reasonable excuse but it will need to be proven.  If they are submitted really late penalties will be imposed. This also applies to the PSA reports due.

Home Expenses: There has been a written statement in Parliament with legislation due on home office expenses which companies have being providing for their employees for home working.  Expectation is that they will be exempt from NI insurance etc.  If an employer has provided extra equipment (e.g. Additional screens) those expenses will not be seen as a taxable benefit and there will be exempt. This will be a temporary measure until the end of the tax year 2020/21. Further information HERE

Extension to Furlough: The process will continue as is until the end July. The extension is now in place from August to October with furloughed employees allowed to do some part-time work. Questions still remain about what part-time work means and what additional contribution will employers have to make towards the furlough scheme. Further details to be announced.

CJRS

• First applications went in to HMRC portal on 20th April with first payments on 27th April – processing within 6 working days.  Clients grateful to see monies going into bank accounts helping to keep majority of small businesses alive.
• For an employer when less than 100 employees the process is manual with a requirement to copy and process in information.  This does require to be re-entered each time a claim is required as the system does not store data.
• Average number of employees for an employer seems low – statistically it is 90% that have less than 10 employees so that is why we are seeing lower end being so high. Larger employers are low in terms of claims.

From a developers’ perspective, due to tight timelines involved in getting this into operation, we were not part of the private beta which meant not finding out what was an acceptable file format to upload until just before release date.

BASDA continue to have ongoing discussions with HMRC seeking clarity and updates on the following:

• HMRC calculator tool: HMRC is working to get something out promptly so that funds can reach recipients as quickly as possible. Not 100% there yet.  Delays involved due to the requirement to go through policy and receive ministerial approval but we are continuing to feedback to them.
• Duplication/requirement to enter information each month – the average employer does not realise this when comes to doing the next payroll (i.e. May).  BASDA will feed this back into HMRC and suggest that guidance is required to ensure it is clear that there is an additional requirement to re-enter data.
• The issue of batch files has been flagged and escalated with HMRC. HMRC have advised they wish to see system performance to see it holds up to existing levels before they make any change. Our ask is to reduce this down to 20.  If we can achieve that it will reduce additional workload in this process.

The Payroll, Pensions & HR Specialist Interest Group is continually active and engaging with HMRC.  Please ensure you (and appropriate colleagues) are on the email distribution list for updates or should you wish to escalate any issues or questions you may have – email marketing@basda.org

Update as at 30th April 2020

Daily meetings with HMRC Employment & Payroll Group (EPG) are ongoing to feedback member concerns, seek clarification and to demonstrate end use cases.

• Employees being on RTI submission – fed back for weekly but not ideal for monthly and BASDA has provided an ‘end use case’ where, if the employee was taken on by 28 Feb but not paid until 28 March, it is not applicable.
• Additional clarification was sought on calculations.
• SSP is relatively quiet and BASDA have fed back (DWP driven) – Job Retention Scheme is being sorted out as a priority.
• This information is being fed back on behalf of all BASDA members and the Chair of the SIG will ensure it gets raised with HRMC on the calls/meetings.  HRMC is working with the stakeholder group to understand all the needs (as there are lots of complexities) and they are heavily engaged with businesses.

Members are advised to keep updated with the gov.uk website which is incorporating the feedback which BASDA and other members of the EPG are providing.   Guidance is changing and BASDA is providing HRMC with real-life scenarios on how the process works and what changes need to be implemented. BASDA is committed to working hard on behalf of members and is fully engaged as a software industry.

If you have any questions or topics that you need to be raised to HRMC through the SIG Chair please email marketing@basda.org