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Businesses need to take care with new furlough scheme rules, says WMT Chartered Accountants
The Government has finally released its full guidance on the furlough scheme extension, which contains a number of important changes that could affect how businesses make use of the latest support, according to St Albans-based accountancy firm WMT Chartered Accountants.
The newly extended Coronavirus Job Retention Scheme (CJRS) will now remain in place until 31 March 2021, offering to cover 80 per cent of employees’ wages, up to £2,500, for the hours they do not work.
Employers are only required to pay for hours worked and National Insurance and workplace pension contributions.
Andrew Williamson, Managing Partner at WMT Chartered Accountants, said businesses looking to make use of the new scheme need to act quickly, as they only have until Friday 13 November to agree to retrospectively furlough or flexibly furlough an employee from 1 November.
However, in the rush, Andrew explained, it might be possible to miss out on new rule that could affect a business and its reputation.
“While many employers have welcomed this new extension, a change to the rules may allow HM Revenue & Customs (HMRC) to publish the names and registration numbers of limited companies and Limited Liability Partnerships (LLPs) that claim a grant from the CJRS,” said Andrew.
“It is not really clear yet why the Government has taken this decision, but not every business may appreciate their use of the scheme being made public and so it is something they should consider when making a claim.”
WMT Chartered Accountants also said that businesses needed to take extra care over planned redundancies for furloughed staff, as the Government is considering new rules regarding pay for those that are dismissed.
Andrew said: “The Government announced in its guidance that it is considering rule change from 1 December 2020 to prevent claims in respect of employees serving contractual or statutory notice periods.
“Unfortunately, businesses will not receive further guidance on this until later this month, but they need to think about how they will handle future payments to employees that are leaving the company, as they may be required to contribute more to the costs of dismissal.”
As well as new rules around notice periods, the guidance contains measures relating to maternity leave and the steps businesses can take where they believe they have underclaimed for the furlough grant.
“The latest guidance is covered in more than a dozen separate documents and there are lots of fine details that businesses must abide by, including complex calculations for working out the amount of financial support available via the CJRS,” said Andrew.
“Penalties for any errors can be quite significant, so many businesses could benefit from seeking professional assistance with their payroll processes to ensure they remain compliant with the latest rule changes.”
WMT Chartered Accountants has been working with local businesses for many months, assisting them with the administration of the CJRS. It is offering advice to any employers that need support with the furlough scheme.
To find out more about WMT Chartered Accountants’s dedicated COVID-19 support services, please visit www.wmtllp.com.