CJRS - Furlough - Claim without RTI setup?

[konsultant]

My company has not been generating income since March 2020, but the payroll (RTI) was only setup in April 2020 for new tax year.

Based on this, can anyone please advise if I am eligible to make a claim in the furlough scheme?

Me and my accountant are playing a blame game as to who was responsible for setting up Can anyone from legal background advise if this consitutes a lapse by them?

Regards

[Lance]

Sorry. What’s the problem?

Was your RTI not setup for TY 19/20?
Presumably you were taking a salary under PAYE and can prove it so ring HMRC and ask them.

[AR Tax]

My company has not been generating income since March 2020, but the payroll (RTI) was only setup in April 2020 for new tax year.

Based on this, can anyone please advise if I am eligible to make a claim in the furlough scheme?

Me and my accountant are playing a blame game as to who was responsible for setting up Can anyone from legal background advise if this consitutes a lapse by them?

Regards

"Employers can claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020. This means that the employee must have been notified to HMRC through an RTI submission notifying payment in respect of that employee on or before 19 March 2020."

Consequently, according to the above, it looks like you are not eligible.

Your second question is interesting and I suspect you can't be the only person that falls into this situation. I guess the answer depends on different factors.

Was you actually paying yourself a salary from your business bank account based on your accountant's advice and have only subsequently realized that no RTI submissions have been done despite the agreed monthly salary payment? If so, how much were you paying yourself?

What does your letter of engagement/contract with your accountant specify? Does it include PAYE/RTI submissions?

Did you previously agree not to setup a PAYE scheme if you were being paid below the lower earnings limit (£118/week)? Or was there an agreement not to go onto PAYE for tax year 2019/20 as you had already earned a large salary that tax year?

How long has this been going on for? If for several years, did they ever explain the lack of pay slips, lack of P60's, maybe a lack of salary being declared on your personal tax return?

[konsultant]

Thanks both

Just to provide more details, I only realised that RTI was not setup by accountant for TY 19/20 when I discussed about making a CJRS claim.

I was in perm and returned to contracting towards end of 19. At this point, niether me nor accountant discussed about setting up payroll/ RTI.

I took money out from business ac as salary in the same way I did before going to perm, but this was not processed/ setup only to realise when discussing the claim.

So I was asking - if I am eligible? What can I do in this situation?


Was your RTI not setup for TY 19/20?
Presumably you were taking a salary under PAYE and can prove it so ring HMRC and ask them.

Correct for both, but for the 2nd question - I took some money out as salary but HMRC will have no record as RTI was not setup.


Was you actually paying yourself a salary from your business bank account based on your accountant's advice and have only subsequently realized that no RTI submissions have been done despite the agreed monthly salary payment? If so, how much were you paying yourself?

Yes I was, but there was never any discussion/ advise by accountant

What does your letter of engagement/contract with your accountant specify? Does it include PAYE/RTI submissions?
Yes it does

Did you previously agree not to setup a PAYE scheme if you were being paid below the lower earnings limit (£118/week)? Or was there an agreement not to go onto PAYE for tax year 2019/20 as you had already earned a large salary that tax year?


I always had PAYE setup previously when I was contracting


Regards

[GhostofTarbera]

You have taken loans out of your company

Not salary or dividends (as not declared)




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[northernladuk]

If you've been perm part of the year it's often the case that it's not efficient to pay anymore salary as you'll be paying more tax on it than you need to so just stick to dividends for the rest of that year. I expect that's what the accountant was meaning. You paying yourself a salary wasn't part of his plan I'd imagine.

[konsultant]

You have taken loans out of your company

Not salary or dividends (as not declared)

Sent from my iPhone using Contractor UK Forum

No, I can declare as dividend though I intend to take as salary but upon knowing RTI was not setup by accountant they will be dividend.

Anyways my original question was of eligibility to claim given the details in my 4th post and if there have been any lapses by the accountant here .

Thanks

[Lance]

No, I can declare as dividend though I intend to take as salary but upon knowing RTI was not setup by accountant they will be dividend.

Anyways my original question was of eligibility to claim given the details in my 4th post and if there have been any lapses by the accountant here .

yeah.no..... that's not how dividends work. You don't declare a dividend after the fact any more than you do salary.
It's a loan like GoT said.

[konsultant]

If you've been perm part of the year it's often the case that it's not efficient to pay anymore salary as you'll be paying more tax on it than you need to so just stick to dividends for the rest of that year. I expect that's what the accountant was meaning. You paying yourself a salary wasn't part of his plan I'd imagine.

That is true wrt paying more tax, but the accountant never advised to not take any salary.

The whole salary discussion only came around when I enquired about CJRS and it is then we realised that RTI was not setup.

I wanted to understand my options about eligibility based on this situation or what else can I do? As I am not generating income since March but the only thing is RTI was not setup. I have generated invoices till Feb.

[zonkkk]

Depends on your accounting package but the accountant should have asked you if you want to take salary from the company and set it up for you.
If taking a salary would not have been efficient for your tax situation (i.e. you went over the NI threshold due to your previous PAYE income for the year), RTI should have been set-up and reported to HMRC as 0 if you don't have any other PAYE income.
Who is your accountant?