Corona Virus Job Retention Scheme (CJRS)

[dave2007bc]

My Dad had the email today noting that as of tomorrow he and his colleagues will be going onto the CJRS (80% salary max £2.5k pm) for the near future.

He's in 40% tax bracket (£45k pa) but also has a company car.

Will he still be taxed for the company car (given he can't use it/doesn't need it?) This is about £300pm currently.
If he is taxed, will it be at the 40% value or drop to the 20% (as £2.5k pm is £30k pa)

Fully understand that this scheme is brand spanking new but hopefully their may be some accountants on here that can help

Just wondering if anyone has had to deal with this yet for their employees or clients.

Thanks in advance

[2 sMoKiN bArReLs]

I guess while he has the car he will be taxed. Can he return it? (Although I'd rather pay the tax & keep hold)

We are about to start a new tax year where his earnings will be at the lower tax rate I guess.

[2 sMoKiN bArReLs]

2 sMoKiN bArReLs said:

I guess while he has the car he will be taxed. Can he return it? (Although I'd rather pay the tax & keep hold)

We are about to start a new tax year where his earnings will be at the lower tax rate I guess.

A lot of guessing there.

[JulianPH]

dave2007bc said:

My Dad had the email today noting that as of tomorrow he and his colleagues will be going onto the CJRS (80% salary max £2.5k pm) for the near future.

He's in 40% tax bracket (£45k pa) but also has a company car.

Will he still be taxed for the company car (given he can't use it/doesn't need it?) This is about £300pm currently.
If he is taxed, will it be at the 40% value or drop to the 20% (as £2.5k pm is £30k pa)

Fully understand that this scheme is brand spanking new but hopefully their may be some accountants on here that can help

Just wondering if anyone has had to deal with this yet for their employees or clients.

Thanks in advance

Unless your Dad has other income then he will not be a higher rate taxpayer based on the figures you have provided.

His highest rate of tax will be 20% (including the P11D benefit in kind of the car).

If he is paying 40% tax without other earnings or benefits in kind then just give me a shout to get it sorted.

[Hungrymc]

The retention scheme requires the employer to pay full salary and then claim back 80% or 2.5k whichever is less.

Is some of your dads pay bonus / performance related? It’s based on contracted pay.

[4Q]

Hungrymc said:

The retention scheme requires the employer to pay full salary and then claim back 80% or 2.5k whichever is less.

Is some of your dads pay bonus / performance related? It’s based on contracted pay.

That’s not the way I read it, I only HAVE to pay 80% and topping up to full salary is optional

[SAS Tom]

Hungrymc said:

The retention scheme requires the employer to pay full salary and then claim back 80% or 2.5k whichever is less.

Is some of your dads pay bonus / performance related? It’s based on contracted pay.

It doesn’t require the employer to pay 100%.

[4Q]

With respect the article is just that, an article. The government website quite clearly states that the employer doesn’t have to pay more than 80%

[4Q]

For the record I will be topping up the majority of my employees wages to 100% (out of my own pocket) although the ones who have been kicking off about lost holiday days they’d booked off during the three months paid furlough can go fk themselves.

[4Q]

PF62 said:

Would you have a link to support that statement.

About halfway down

https://www.gov.uk/government/publications/guidanc...

“To qualify for this scheme, you should not undertake work for them while you are furloughed. This will allow your employer to claim a grant of up to 80% of your wage for all employment costs, up to a cap of £2,500 per month.

You will remain employed while furloughed. Your employer could choose to fund the differences between this payment and your salary, but does not have to.”

[4Q]

Jasey_ said:

This is the Gov website and it states the Gov will re-imburse 80% of what has been paid by the Employer;

https://www.businesssupport.gov.uk/coronavirus-job...

Unless there is another site this appears clear to me that the employer has to pay 100% of the pay and will get 80% back.

I don’t want to get in to an argument when there is no definitive advice yet but I cannot see where it says on that page that I have to pay 100%? The government page I linked to above says that employers don’t have to

[Phil Dicky]

4Q said:

Jasey_ said:

This is the Gov website and it states the Gov will re-imburse 80% of what has been paid by the Employer;

https://www.businesssupport.gov.uk/coronavirus-job...

Unless there is another site this appears clear to me that the employer has to pay 100% of the pay and will get 80% back.

I don’t want to get in to an argument when there is no definitive advice yet but I cannot see where it says on that page that I have to pay 100%? The page I linked linked to says that employers don’t have to

You don't....you pay 80% and are reimbursed by the Government.

[4Q]

As I said in an earlier post I’m not going to be harsh and am planning to top up most of my employees up to 100% anyway. The two employees who are being dicks will find themselves redundant before I get myself into debt further to fund the additional 20% if I’m forced to pay them at normal rates.

We have had no income for the past two weeks and not likely to get any more until this has blown over so I cannot find the additional 20% indefinitely if I had to which would defeat the whole point of this scheme if I let them go in 3 or 4 months

Edited by 4Q on Wednesday 25th March 22:37

[4Q]

PF62 said:

And what does your employee’s contracts say.

I don’t have the exact words to hand but along the lines that I have the right to suspend their employment without pay in the event of us being unable to carry out our normal business operation due to circumstances beyond our control.

[Hungrymc]

That was my understanding.... That the gov reimburse 80% of what the employer pays out (or 2.5k, whichever is less).

However the earlier link did say the employer can “choose” so I don’t know.

I guess it’s always possible to renegotiate a contract, particularly in tines like these.

[dave2007bc]

Thanks for all the replies.

I believe it was £45k pa plus a £5k bonus but it's the company car which puts him into the 40% (335d).

Anyway, as I suspected it seems there is a lot of questions about how this will all work. I think he's going to try and get the car removed from his package during the furlough to get some money back.

He's only expecting the £2.5k pm, the employer isn't planning to 'top-up'.

[MOBB]

I would have thought that parking the car at the workplace and getting the employer to advise HMRC that it isn’t available for private use would be acceptable

[cailean]

dave2007bc said:

Thanks for all the replies.

I believe it was £45k pa plus a £5k bonus but it's the company car which puts him into the 40% (335d).

Anyway, as I suspected it seems there is a lot of questions about how this will all work. I think he's going to try and get the car removed from his package during the furlough to get some money back.

He's only expecting the £2.5k pm, the employer isn't planning to 'top-up'.

Current view from our law firm advisors is that the employer top up is required if the employee contract does not allow a reduction without the employee's agreement. This could open a huge can of worms with thousands of employees claiming against their employers for unpaid wages. The alternative is redundancy, so most employees may agree to the reduction.

[wackojacko1234]

Can't seem to make my mind up if going on furlough leave is a good or bad thing... those on the furlough leave at home with the feet up on sofa against those continuing to work on... What's likely to happen when the preset furlough leave scheme ends...?

[uk66fastback]

wackojacko1234 said:

Can't seem to make my mind up if going on furlough leave is a good or bad thing... those on the furlough leave at home with the feet up on sofa against those continuing to work on... What's likely to happen when the preset furlough leave scheme ends...?

It's a good thing if you have 100s of small DIY jobs to do round the house (like me) and you can never find the time - and you don't need 100% of your wages to survive (which fortunately I don't). It's a bit less in the ol' sky rocket but it's eight weeks off to do other stuff if you can - work on the cars etc.