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COVID-19 CJRS update 30-4-20

CJRS Claim Issue for Directors paid Annually

We were already aware that Directors dividends could not be included in calculating any grant claim under any of the COVID-19 income support measures, “Tough, but, probably fair“, we thought! However, it has also now become apparent that in cases where directors are paid annually in March each year, access to the CJRS claims portal is being denied.

When attempting to make a claim, we are faced with the following on screen message:

The employer is registered for PAYE online, but our records show that on 19th March 2020 there were no employees on the payroll.  Furloughed employees must have been on the employer’s PAYE payroll on 19th March 2020 to be eligible for this scheme.

Along with many other accountancy firms, regulatory bodies, the Institute of Directors, and now some MPs, this issue has been raised with the government. So far, the public response has been as follows:

“The HMRC CJRS portal is rejecting claims from some annual payrolls. The legislation – paragraph 5(a)(i) of the direction – makes it clear that claims must relate to an employee to whom the employer has made a payment of earnings in the tax year 2019/20 that was made before 19 March 2020. This issue has been raised with HMRC, but it would appear that the system is working in accordance with the legislation and the annual payment must have been included in an RTI report filed by 19 March 2020”

In short, this means that unless a director has been included in a payroll run during the tax year 2019-20 and before 19.3.20, evidenced by an RTI submission before that date as well, they will be excluded from the scheme.

Clearly, we hope that the government will bow to the ever growing public and media pressure, and change the qualifying criteria to allow those annually paid to make a claim. But, this is likely to take some time.

The meantime, if you are in need of support you can use HMRC’s support finder tool to see what else is available to you.

Also, follow the Twitter hashtag #forgottenLTD for the latest comments on this issue.

We will advise on developments concerning this matter has soon as we become aware of any.

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