Reminder: clients with a Time to Pay arrangement who have also claimed the CJRS grant for furloughed staff
In the last few weeks we have seen a number of organisations being contacted by HMRC in writing saying that the payment of the CJRS grant (for furloughed employees) was conditional on the employer paying the related PAYE tax, employer National Insurance Contributions (NICs) and pension contributions.
The guidance says, “You must pay the full amount you are claiming to your employee and pay the associated employee tax and NICs, even if your organisation is in administration. If you’re not able to do that, you’ll need to repay the money back to HMRC. The same applies in relation to employer NICs and pension contributions you claim regarding your employee. The full amount you claim in respect of these must be paid or you will need to repay the money back to HMRC.”
This information ‘Claim for wages through the Coronavirus Job Retention Scheme’ can be found on GOV.UK. The additional section covering PAYE payments appears to have been added on 21 May 2020.
If you have a Time to Pay (TTP) arrangement in place for your PAYE payments, this should override any other payment obligation you have to HMRC. But they do seem to be taking a different view here, after issuing their initial guidance and realising there was a potential loophole.
Should you require a period of grace to make these payments we suggest that you call up the TTP hotline to renegotiate these payments.
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If you would like to discuss this in more detail, please contact your usual Moore Kingston Smith Partner.