Caution with NICs within Coronavirus Job Retention Scheme Claims

8th May 2020

Small businesses may be making errors in the amount claimed for furloughed employees within the government Coronavirus Job Retention Scheme due to incorrectly claiming totals including NICs. 

If you are a small business using the current Employment Allowance to reduce your NICs and you are claiming from the government for furloughed employees then you may be risking having to pay back money to HMRC at a later date if submitting an incorrect claim.

Within the existing Employment Allowance, if you pay less than £100,000 per year in NICs then you are able to apply for up to £4,000 of tax relief.  If using this tax relief then these NICs will already class as having been paid by HMRC within your furlough claim.  Therefore they should not be claimed within the total submitted.

The scheme has been praised for the speed with which it was set up and how swiftly claims have been paid, but this means that onus has also been put on businesses to ensure they are making a correct claim.  It is safe to assume however that all claims will be checked and verified by HMRC at a later date and businesses do not want to be in a situation where they are having to pay back thousands in incorrect furlough claims.

An HMRC spokesperson told Accountancy Daily: ‘We understand that sometimes there might be an error in applications, and we are working on a process for claims to be amended after submission.  If we spot an error then, where possible, we are contacting the employer or their agent to clarify the application.’

A calculator has been made available to work out totals for the Coronavirus Job Retention Scheme, but there are factors that are not necessarily clear within this, especially if you are topping up your employee wage to 100%, which the calculator does not cover.  If in doubt, you should always consult a payroll professional for any PAYE or employee wage matter.  Our payroll team is available to assist all clients with queries by contacting julie.bryan@ttrbarnes.com

All information published is for general consumption and should not constitute financial advice.  All coronavirus updates are being written and distributed as timely as possible for the convenience of our audiences and will be monitored regularly for any updates and/or corrections.  Individual circumstances will vary and professional advice should always be sought on all matters before action is taken.

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