Coronavirus Job Retention Scheme (JRS) - Advice for Motor Dealers

Motor

New Rules and Advice for Dealers

Some further, quite fundamental updates, from 17th April 2020.

Probably the most important item to note that is still causing a lot of concern relates to commissions.

The Treasury issued their own Direction (The Coronavirus Act 2020 Functions of Her Majesty’s Revenue and Customs (Coronavirus Job Retention Scheme) Direction) on 15th April in addition to the Gov.uk guidance, mainly from HMRC, which as a legal document has wording that is at best potentially confusing on the matter of compulsory (contractual) commissions and discretionary bonuses.

The latest guidance says to include regular payments you are obliged to make, including:

  • regular wages you pay to employees
  • non-discretionary overtime
  • non-discretionary fees
  • non-discretionary commission payments
  • piece rate payments

Dealers cannot include the following when calculating wages:

  •  payments made at the discretion of the Dealer where you are under no contractual obligation to pay, including: tips
  • discretionary bonuses
  • discretionary commission payments
  • non-cash payments
  • non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay

The latest guidance says to choose the calculation Dealers think best fits the way employees are paid.

HMRC will not decline or seek repayment of any grant based solely on the particular choice of pay calculation, as long as a reasonable choice of approach is made.

The scheme has been extended to 30th June 2020. Foreign nationals are eligible to be furloughed Employees can take holiday whilst on furlough. Working Time Regulations require holiday pay to be paid at the employee’s normal rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the previous 52 working weeks.

If an employee usually works bank holidays the Dealer can agree that this is included in the grant payment. If the employee usually takes bank holidays as leave the Dealer either has to top up their usual holiday pay, or give the employee a day of holiday in lieu.

After submitting the claim Dealers should:

  • • keep a note of your claim reference number - no SMS or email confirmation will be provided
  • • retain all records/ calculations for your claims - HMRC may need to contact you about them
  • • expect to receive funds six working days after application, provided your claim matches records that HMRC hold for your PAYE scheme
  • • to receive payment by 30th April, you will need to complete an application by 22nd April

HMRC will check claims made through the scheme. Payments may be withheld or need to be repaid in full to HMRC if the claim is based on dishonest or inaccurate information or found to be fraudulent.

Motor dealerships with fewer than 100 furloughed staff:

You will be asked to enter details of each employee you are claiming for directly into the system.

This will include their

  • name,
  • National Insurance number,
  • claim period,
  • claim amount, and
  • payroll/employee number (optional).

Motor dealerships with 100 or more furloughed staff:

You will be asked to upload a file with the information rather than input it directly into the system. HMRC will accept the following file types: .xls .xlsx .csv .ods

The file should include the following information for each furloughed employee:

  • name,
  • National Insurance number,
  • claim period,
  • claim amount, and
  • payroll/employee number (optional).

Download a copy of the guide below or contact a member of our specialist team.

Nigel Morris, Employment Tax Director, nigel.morris@mhllp.co.uk, Tel: 07718 340634

Stephanie Pote or Colin O’Kane, Senior HR Consultants, HRSolutions@mhllp.co.uk

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COVID-19 Job Retention Scheme (JRS) Update



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