HMRC have now provided an update affecting those who are looking to defer PAYE payments through the Time To Pay system, but who also have furloughed employees.
Basically, any PAYE which relates to furloughed employees is not eligible for the payment deferral. This will relate to payments of PAYE and Class 1 NIC due to be paid for Month 12 of 2019/20 and Month 1 of 2020/21 for those furloughed in those months. It will affect payments due from 22 May onwards. So, if a business had previously agreed to defer PAYE for it’s April payroll and say its total payroll costs were £10,000 of which £2,000 related to furloughed employees, then the PAYE on that £2,000 would have needed to be paid over by 22 May 2020.
So, going forward it will effect those who have furloughed employees and made arrangements since 22 May 2020 with HMRC to have PAYE payments deferred.
Not paying over the PAYE relating to furloughed employees could be regarded as a payment default by HMRC, with the resulting penalties.
May 26th, 2020