Contributions – employer/member meaning

ARCHIVED: This Practice Note has been archived and is no longer maintained. It sets out the different iterations of HMRC and DHSC guidance on the Coronavirus Job Retention Scheme (CJRS) released over time, and supplies tracked-change comparisons highlighting alterations from one update to the next, so practitioners can quickly determine which version of the relevant guidance applied on any given date. For a guidance tracker: covering the successive versions of HMRC guidance on the Self-Employment Income Support Scheme (SEISS), see Practice Note: Self-Employment Income Support Scheme—guidance tracker [Archived] covering the successive versions of general guidance on coronavirus (COVID-19), see Practice Notes: Coronavirus (COVID-19)—guidance tracker for employment (non-BEIS guidance) [Archived] and Coronavirus (COVID-19)—guidance tracker for employment (BEIS working safely guidance to 18 July 2021) [Archived] Separate sections of the Practice Note cover: Treasury Direction Guidance for employers: Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme Check which employees you can...

ARCHIVED: This Practice Note is archived and is not maintained. What is the CJRS? At the Spring Budget 2020, the government introduced a range of steps to support businesses through the coronavirus pandemic (eg suspending business rates). One such measure was the temporary ‘Coronavirus Job Retention Scheme’ (CJRS), which was generally available to UK employers with a PAYE payroll, subject to eligibility rules. The scheme started on 1 March 2020 and, following several extensions, remained in place until 30 September 2021. Its purpose was to help employers whose operations were badly hit by coronavirus and who might otherwise have needed to make redundancies. Staff included in the CJRS were referred to as ‘furloughed’. Under the CJRS, employers were able to claim for furloughed workers as follows: Up to 31 July 2020: 80% of an employee’s wages, capped at £2,500 per month, plus employer National Insurance contributions (NICs) and pension contributions—the amount of pension contributions recoverable up to 31 July 2020 is discussed below ...

As a general rule, pay as you earn (PAYE) requires employers to withhold tax and employee National Insurance contributions (NICs) from wages, and these sums cannot normally be reclaimed straight from the worker. This Practice Note considers the limited situations where, by exception, PAYE sums can be sought from the employee rather than the employer. Comparable rules apply for NICs, allowing outstanding contributions to be pursued from the employee instead of the employer in defined cases under the NICs rules. Employer fails to deduct correct amount of tax Where the employer has failed to withhold the proper PAYE tax, HMRC may recover any shortfall from the employee in either of the following situations: the employer demonstrates to HMRC that it exercised reasonable care in operating PAYE and that any mistake arose in good faith; or HMRC believes the employee accepted payments knowing the employer deliberately did not deduct the right amount. If either condition is met, HMRC may issue a direction...