Furloughed Employees and Employment Allowance

Hi @MikeConn,

Currently, the option to turn off the employment allowance is unavailable. Let me guide you on how to track COVID-19 SSP in standard payroll.

1. Start your pay run, then Edit next to one employee.
2. Choose Add/edit a Bonus or Other Payment.
3. Hit the Plus icon, then select Other Earnings as the type. You can name the item something along the lines of ‘COVID-19 SSP.’
4. Tick Save and View draft, and then submit your payroll to HMRC as normal.

Please know that you're always welcome to come back anytime in this thread if you have other questions or concerns. The Community is here to help. Thanks for posting and be safe.

Hello,

Thanks for your reply. Can I please clarify. I appreciate that, right now, we can't change the state of Employment Allowance, since it's happened for this year, but I was sort of thinking we could switch it off, temporarily, for next year if it made accounting for government-based repayments easier in the first few months.

I do realise this may all not matter since we could get a refund from the government in addition to not paying the Employer's National Insurance contributions due to the Employment Allowance. Maybe it all balances out in the end? A little bit more guidance from the government, on the finer detail, probably wouldn't go amiss. I do realise it's not the fault of QuickBooks :-).

Thanks

I would like to know this also. As 80% is coming back, do I enable the 2020-2021 Employment Allowance option from July (or whenever the grant scheme ends) as otherwise we will lose out on the £3k as it has been effectively already repaid via the 80%...unless I am missing this. I realise it is only £3k but it is £3k in NI contributions that we can ill afford to lose...

Hello, thanks for this. Was reading about it yesterday afternoon (that's how my Sundays roll these days!) and agree that it is stating that we must enable it and use the allowance to offset any NI ER contributions. So, if I understand this correctly, if we have £3k of NI ER contributions for April then they would be offset by the allowance which means that we cannot claim for them under CJRS. However, if we then have £3k in May then the remaining £1k allowance would offset this amount and leave us able to claim £2k of NI ER contributions under CJRS.

If I never have more than £4k in NI ER contributions during the furlough period then I would not be able to claim any back via CJRS as the Employment Allowance is already granting us relief.

Correct?

That's how I'm reading it as well. Of course, we're only talking about EER NI here, which we're not paying anyway due to the Employment Allowance, so CJRS is still helping a lot. Our accountants had initially told us to leave the Employment Allowance option disabled, until after CJRS, since it would have resulted in less NI being paid overall, but it would seem that HMRC have fully defined the rules on this now.

Great, thanks. So all I think that I can claim this month is the 80% of base salary plus the employer's pension contributions as the employer's NI contributions are covered at present by the Employer's Allowance. Good to be able to run this by someone else so thank you...and good luck!

I was just getting the details together for the first claim and realised that, for us anyway, most of the first two weeks of CJRS are in the last tax year meaning  that the EER NI can be claimed for that period. I hope I'm not wrong but Employment Allowance effectively restarted on 06/04/2020 so I assume any EER NI before that can be claimed.

Hi MikeConn

That is correct, you will be able to claim for any EENI for the last few weeks of the last tax year.

Thanks,  I like that reply :)