In response to the coronavirus pandemic, the UK Government announced different measures to support the economy, one of them being the ‘Coronavirus Job Retention Scheme (CJRS)’.

On 1st March 2020, CJRS came into existence. As per the scheme, the government took the responsibility of paying 80% of wages for the hours not worked, to a maximum limit of £2,500 plus employer National Insurance contributions as well as the minimum employer auto-enrolment pension contributions.

The thing about CJRS is that it’s been evolving ever since it came into existence. As the months passed by, different changes were coming into effect. So, in order to keep a track of the changes, here’s a timeline for accountants to bear in mind:

The Purpose of CJRS Extension

Considering the series of lockdown and the economy not being able to come on track, the UK Government decided on extending the Coronavirus Job Retention Scheme from 5th November 2020 to 31st March 2021. Its purpose was to enable businesses to revive and recalibrate and provide a sense of certainty for the future.

As per the Extended CJRS, Government will be paying 80% of wages (up to £2,500) and the employers will pay for NICs and pension contributions for the furloughed hours.

It was announced that it will take some time to update the legal terms and system. So, businesses will have to claim in arrears for this period. Also, in January 2021, the terms of the scheme will be reviewed.

What Remains the Same through CJRS1 & CJRS 2?

• All employment rights like holiday pay and leave remain the same during the furlough.
• CJRS claims are applicable when employees are on sick leave. It is up to the employer to either pay SSP or furlough pay, however, the latter one is more beneficial.
• Employers are not obligated to top up the furlough pay.
• Employers will still be liable to pay for NICs and pension contributions for the hours not worked.
• Employees can choose to work for another employer in their furloughed hours.

Rules for Claim Periods and Deadlines 

Claim periods from November have monthly deadlines. One must submit their claims within 14 calendar dates of the month they belong to, provided they don’t fall on a weekend. If it’s a weekend, the claim date shifts to the next working day.

One can claim before, during or after one processes their payroll but the claim must be submitted on time.

Here are the steps one needs to follow to avail your employees’ furlough claims through CJRS:

Step 1: Check your claim: Figure out if you are eligible for the claim and if yes, then how much?

Step 2: Decide who will claim: Decide who will make your claim. You or an agent on your behalf? Once decided, register yourself (or your agent) for PAYE online to make a claim.

Step 3: Make your claim: Provide the necessary information about your business and employees. Include all of your employees while making the claim because your claims cannot overlap in the same period. So, you can make one claim each month.

Step 4: Calculate your claim: For employers with employees with defined salaries, you will have to calculate the total amount being paid to furloughed employees.

Step 5: Get your claim: Use your Government Gateway user ID and password that you received by registering for PAYE online.

Step 6: After you’ve claimed: Once done with the process, a claim reference number will be highlighted on screen. Note down or print the reference number, as there won’t be any email confirmation.

How CJRS Affected the Payroll Process?

Referring to the steps mentioned above, you can conclude that the payroll process is not as simple as it used to be. The fact that the wages are paid by the Government and employers, both, makes it a more complex and tedious task. Payroll has become trickier this year. Here's how:

• With so many calculations to do, accountants are more susceptible to making errors.
• Accountants are supposed to calculate furlough wages for each of their employee which is the most cumbersome part of the process. For each employee, there’s a different salary, different work hours and different furlough hours.
• Adding to the complexity is the changing percentages of claims and the rules of CJRS.
• Clients and employees now have more queries regarding the changes and salary calculations which take long discussions to get resolved.

Tools You Need to Calculate Your Furlough Claim

 As soon as the furlough scheme launched, the HMRC rolled out a calculator that was meant to ease the headache of payroll calculation. The aim was to work out the total amount to be paid to furloughed or flexibly furloughed employees. But like most online government tools – there was a catch: The Reset Button. 

With QX Furlough Calculator, you can bid farewell to the problem of resetting. You can easily calculate claims for multiple employees in one go. It’s convenient to use and allows to submit to GOV gateway directly.

Here’s the simple process of making claims using the QX Furlough Calculator:

1. Fill the information: Enter the Required Data for Multiple Employees
2. Calculate: Get Your Combined Calculation Report
3. Claim: Save & Submit Report Directly to GOV Gateway to claim for the CJRS

Offshore Team Members to the Rescue

For Accountants, 2020 was all about having too much on their plates. They had to help their clients revive their businesses and continue with the accounting tasks that they have been doing since ages. Now, payroll being a more complicated process is an added headache.

In order to dodge the problem, many accountants chose a smarter way of choosing to outsource and here’s how accountants could benefit from outsourcing payroll during COVID:

Say Goodbye to Furlough Calculation & Compliance Headaches

Given the evolving nature of CJRS, it is tricky for accountants to keep a track of all the changing legislation and take action accordingly. In order to address the problems, what accountants need is payroll expertise that allows them to help their clients deal with the process of claiming furlough from the beginning to the end. They need someone to manage the details of each employee, furlough calculations and liaising with HMRC as well as the pension providers – all within the deadline.

The right outsourcing provider helps you navigate through this burdensome and complex payroll process. They take away your stress by taking care of the payroll entirely. There leave no room for mistakes which means no penalties resulting in audits and penalties and better client relationships.

Reducing Overhead Costs and Saving More Time

While dealing with the complicated furlough scheme, accountants are susceptible to more making more errors which can lead to loss of time and money. In addition to this, there are other hidden costs like utilities, system maintenance and employee training that make the payroll process even more expensive. As the costs come darting at independent practices during the rush season of payroll, how do firm-owners seal the hole in their pockets while also delivery high-quality payroll services?

Outsourcing helps accountants submit the right data to HMRC on time. Most importantly, it saves the cost and time of incurring mistakes and revising them. There is no repeated training that needs to be given to the in-house team regarding the new legislation and the regulations for payroll by the Government.

How an Offshoring Team Will Take Care of Your Payroll Hassles

1. Receiving data from your in-house team
2. Identifying the number of furloughed employees
3. Recalculating the salaries for work and furlough hours of each employee
4. Processing the payroll and sending reports to you
5. Reports are reviewed by the clients
6. In questions/queries arise from the employees/ your end, the offshore team resolves it
7. Once approved by your in-house accounting team, offshore team members file RTI Submissions
8. You provide confirmation for the RTI submission
9. After the RTI submission, the offshore team files those furlough claims with HMRC

Summing up

We are fully aware that 2020 has been challenging to deal with. Outsourcing has proven out to be an ultimate solution to the challenges posed by COVID-19 crisis. Despite the issues, accountants have been able to deliver high-quality services, focus more on revenue-generation activities and build healthier relationships with their clients. It’s a trend that is meant to stay in the accounting industry for the longest of time.

So, are you ready to join hands with an outsourcing firm and escalate your firm’s growth? Let’s discuss your payroll outsourcing strategy today. Know more here.