Summary
Description
NOTE: You must submit any claims for July 2021 to HMRC no later than Monday 16 August 2021.
Resolution
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Differences between the Job Retention Scheme Module and HMRC
HMRC understand that there may be differences when processing furlough claims and we’re working with them to make this process as simple as possible for you. Although you may find there are some slight differences between the calculation returned from the Sage Job Retention Scheme Module and HMRC, rest assured we’re here to support you through this process and get you all the information you need to submit your claim as quickly as possible.
Why are there differences?
There are two common reasons for these differences. To find out about these and what you need to do to correct them, check the table below. Please note: These differences are very small, typically less than 1%.
What we're doing
We're working closely with HMRC to refine our calculation based on this new legislation. As with all new legislation, it's constantly updated as HMRC come across different scenarios.
We recommend that you check all calculations before submitting to HMRC to ensure any issues can be corrected. You also have the option of using HMRC's own tool to manually calculate for employees.
If you've already submitted your claim to HMRC
If you've already made a claim that contains a difference, HMRC have advised that they'll enable businesses to submit corrections in the future. They've not yet issued guidance on how this will work. We're working closely with HMRC to understand this and will update this guide as soon as we have more information.
Common reasons for differences
| Potential difference | Why it's different | What you need to do |
|---|---|---|
| Incorrect values: If there are any errors in your previous pay periods or the information that you've entered into HMRC's tool. | The Sage 50cloud Payroll Job Retention Scheme Module calculates your claim based on the processing history in the software. If the processing history or the values you've entered into HMRC's tool are incorrect there will be a difference. | If the values are incorrect in your processing history in Sage 50cloud Payroll, you need to rollback then process the wages again with the correct values. If the values are incorrect on HMRC's tool, you can simply re-enter the correct values. |
| Daily rate calculation: There's a small difference, over March and April, between how the module calculates the daily rate furlough entitlement for employees against HMRC’s tool due to varying days within a month. For more information on this, check the fixed employee example in this article. | The module calculates the daily rate differently to HMRC tool. This results in less than a 0.2% difference over March and April. | No further action is required. This will even itself out over the periods you claim. Alternatively you can use HMRC tool to calculate. |
How the module performs the calculation
You don't need to worry about doing the calculation as the Job Retention Scheme Module does the calculations for you. To find out how the module performs the calculation and why the module may show a different figure to what you're expecting, check our Job Retention Scheme Module calculation guide >
Assess your employees
- Click Company then click Job Retention Scheme.
- Next to step 5, Assess what you can claim for, click Do it now.
- Check the Reference earnings value, the module calculates Furloughed earnings based on this figure.
You can also view the Furloughed Earnings and Furlough Pay values.
If you need to amend the Reference earnings value for any reason, you can change the Employment Type to Manual then click Recalculate.
- Check the value next to Total claimable from HMRC.
- To print the information for your records, click Print.
- To close the screen, click Save.
- You can now send notification letters to your employees.
Why is the Furloughed Earnings value higher than the Reference Earnings?
The Furloughed Earnings value can appear higher than the Reference Earnings value if the furlough claim period dates are greater than a single pay period, for example if you're claiming for September and October. The reference earnings value is the calculated earnings for one full monthly period and the furlough pay value is the furlough pay on the total claim period.
Why are the furloughed earnings lower than expected?
If you have any employees that have been flexibly furloughed, the reference earning will show the earnings for the full pay period like it does for all employees who've been furloughed. However, when an employee is flexibly furloughed the furloughed earnings are pro-rata'd based on the hours worked within the furloughed period.
Watch the calculation videos
To help you understand the calculations performed by the Job Retention Scheme Module, we've put together some short videos with explanations and examples. Watch the videos >
Disclaimer: This article provides general rather than specific guidance to assist all of our customers. We always do our best to make sure that the information is correct but as it's general guidance, no guarantees can be made concerning its suitability for your particular needs. The information is valid at the time of publishing and is provided without any warranty of any kind, express or implied. You should take professional advice if you require specific guidance on your individual circumstances, for example to ensure that the results obtained from using our software comply with statutory or regulatory requirements. For Employers, PAYE, NIC and general tax enquiries you should call the HMRC helpline on 0300 200 3200 or visit their website at www.gov.uk In no event will we be liable to you for any direct, indirect, consequential or incidental loss or damage arising out of or in connection with your use of the information provided.
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