HMRC has admitted that its CJRS claims calculator contained an error which was fixed on 21 January 2021. If you did not use the CJRS calculator for January pay periods before that date, you have nothing to worry about. The error did not affect December 2020 pay periods.
If you did calculate January CJRS claims before 21 January 2021, you should double check those calculations where the claim included all of the following elements:
- variable paid employees
- the variable paid employee’s pay for January 2019 was used as reference pay, instead of 2020;
- the variable paid employee’s pay was different in January 2019 to January 2020.
Where you used the employee’s January 2020 pay in the CJRS calculation, the claim should be correct, and no adjustment is required.
Where you believe the CJRS claim has been overstated for January 2021 or for any other month there are two options for the employer:
- correct the amount claimed on the next CJRS claim; or
- repay HMRC using the online facility
Another point which is tripping up employers making CJRS claims, is the treatment of salary sacrifice arrangements. Any non-monetary benefit provided under a salary sacrifice scheme should reduce the employee’s gross pay, before the 80% of the gross amount paid for furlough periods is calculated. The value of the benefit should not be deducted from the net furlough pay.
Many salary sacrifices involve contributions to a pension scheme. Where the pension contributions have been made through a net pay arrangement those can still be deducted from the furlough pay. HMRC has included a new example (no. 3.18) in the CJRS to illustrate this.Written by the Tax Advice Network