The payroll software companies have mostly acted swiftly to deal with the accounting for Covid grant claims. The links to the major payroll software is set out below.
The Government hopes to have the Portal for the CJRS claims up and running by 20 April. The full details that you need to make a claim, can be accessed here:
- your employer PAYE reference number
- the number of employees being furloughed
- National Insurance Numbers for the employees you want to furlough
- Names of the employees you want to furlough
- Payroll/works number for the employees you want to furlough
- your Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number
- the claim period (start and end date)
- amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
- your bank account number and sort code
- your contact name
- your phone number
The payroll will in essence be processed as normal, however, the gross wages for staff may be at a reduced rate (if they are not being topped up) at 80% of average pay over the last 12 months (or pro-rata if less than 12 months) but capped at £2,500 per month. If you have staff with variable pay, zero hours workers , fixed commissions etc you have to calculate the average pay.
If the employee has been employed for 12 months or more, you can claim the higher of either the:-
- same month’s earning from the previous year
- average monthly earnings for the 2019-2020 tax year
If the employee has been employed for less than 12 months you can claim for 80% of their average monthly earnings since they started work.
If the employee only started in February 2020, work out a pro-rata for their earnings so far, and claim for 80%.
We recommend that furloughed wages being paid are noted as Furloughed Pay on the payslips assuming your payroll provider allows this.
The accounting will be the same as pre covid, with the wage journal being accounted for as normal.
The grant income claimed via the Government portal will be treated as income in the accounts and this is taxable.
If you require assistance or would prefer us to run your payroll during the Covid19 crisis, please contact email@example.com
“As the situation is evolving rapidly, we don’t have all the answers yet. We’ll update this page as we learn more, so check back soon” Xero website at 14 April.
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