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The common mistakes with furloughing

30 April 2020
Mark Friend
COVID-19, Payroll, People

What a week last week was!

The portal went live on Monday 20th April and has proven fairly easy to use. The big problem has been the calculations, with HMRC changing the rules and issuing new guidance at 5pm on Friday 17th April!

The task of getting claims in for our clients has been immense and we have submitted all but the final few of the claims for March and April. We will end up claiming over  £450,000 for our clients with 114 separate claims completed. A monster task, with our tax team working late into the evenings on most nights last week to ensure the monies get to our clients quickly. The first monies hit our clients’ bank accounts in just a few days!

If you are making your own claims here is our list of what we believe will be the six most common claim mistakes  businesses will make:

  1. Claiming employer’s NI when they are claiming employment allowance through the payroll.
  2. Not topping up the employee for bank holidays during the furlough period. Strictly if you don’t it seems this day becomes a normal furlough day and the employee can still claim their bank holidays in the future! The employer therefore loses the full cost of the day rather than just 20%.
  3. Not topping up the employee for normal holidays during the furlough period. As with 2) above this could be costly!
  4. Calculating the furlough claim by reference to the wrong salaries. Particularly those employees on variable pay.
  5. Risking invalidating the claim altogether by getting furloughed employees to carry out a small amount of work during the furlough period, when they should not be asked to do anything at all.
  6. Paying trainees below the national minimum wage when they spend time training- e.g. on online training courses during the furlough period.

Please note however that claims made in good faith and prepared on a reasonable basis will be accepted by HMRC. The reality is that interpretation of the rules will vary from user to user and unless businesses have made terrible errors the likelihood of there being major repercussions is probably low.

If you are doing your own claims and any of the above resonates with you please contact either Andrew Grant or Gavin Hooker.

The content in this blog is correct as at 30/04/2020. See terms and conditions.

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