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JRS - Calculating the Claim
04 May 2020 Julia Ascott, Employment Taxes Specialist
We have been hearing from a number of advisors warning that the calculation of the claim under the Job Retention Scheme (JRS) is not straight-forward for most employers. Care should be taken and BUFDG advise, given the uncertainty surrounding the eligibility of the HE sector, that positions are considered by all stakeholders, decisions are documented and evidence retained to support the actions taken.
Common issues in calculating the JRS claim:
Only one claim can be made per month - this will cause additional calculations for those employers with multiple pay periods within the month, e.g. monthly, weekly, etc. Calculations may need to be apportioned according to the number of days in the pay period in order to align the pay periods
Once a claim has been made, it cannot be amended. It is therefore recommended that the calculations are thoroughly checked internally against the different rules for each grant aspect (e.g. pay, NIC, pension). Most large professional advisors have a JRS calculator which can be used to check your calculations are correct or calculate the claim based on the information provided. For example, PWC have this published this flyer on their offering and BDO's Covid-19 hub can be found here with links to their offering. HMRC's own calculator can be found here
Claims are based on employees reference pay - which will depend on whether they are on fixed or variable pay, but also requires adjustments for discretionary payments.
The pay period to be used is not the latest pay month data from your payroll software. For those on fixed pay, it is based on the last RTI submission on/before 19th March. For those on variable pay, it will depend on the level of earnings either in the same period for the previous tax year, or the average pay in the 19/20 tax year
Pension claims are calculated in a different way as employers must deduct off non-qualifying earnings (first £520) and then only claim 3% back regardless of the pension paid by the employer
The claim must be on the employees pay AFTER any salary sacrifice but before tax. All of the grant provided by HMRC must be paid fully to the employee as cash, no part of it can be 'sacrificed' in order to meet the cost of a benefit.
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04 May 2020 
Julia Ascott, Employment Taxes Specialist
