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Deferring PAYE Payments For Furloughed Staff During COVID19 Measures

8th Jul 2020

If as an employer you have recently or continue to furlough staff due to the current situation that COVID19 measures has placed on businesses with closures and restriction of movement and operating.  Then the chances are you have claimed support from the Governments Coronavirus Job Retention Scheme (CJRS).  You may have also taken the opportunity to arrange a deferral or payment plan for PAYE from HMRC’s Time to Pay offer.

If so, then you need to be aware of a recent development and a change of tact by HMRC.  Initially, HMRC seemed content to defer the full PAYE bill without much resistence or questions.  However, this has now changed, HMRC are now advising employers claiming the grant under the CJRS must pay the PAYE Tax/NIC’s for those furloughed on this scheme.

Under the terms of the CJRS payments in support of furloughed workers, the grant covers furloughed wages and any PAYE deductions on those wages, so HMRC want it paid back!

Therefore, HMRC now expects employers to pay the PAYE bill in respect of their furloughed workers, as/when the monthly PAYE payment becomes due.

You can still apply to defer a proportion of your PAYE bill for workers that are not furloughed.  Before approaching HMRC Debt Management and Banking (DMB) department, you will need to establish what element of the monthly PAYE relates to deductions from those wages where the CJRS payment has been used and deduct this from the amount to be deferred.

It is only the amount relating to the non-furloughed workers which HMRC will now consider for defferral