I am just about to run my first pay on Sage 50 this week processing Furlough pay for a client's employees ...
Having had a chat with the client's accountant, we decided it would make the reporting much easier if we add a new Payment Type in the software when processing furlough pay. It still needs to be used in the calculation of PAYE, National Insurance and counted in your Pension calculations.
It means we can easily produce a report showing the furlough pay ready for when we can claim this back from HMRC. I will pay 80% pay through this payment type and leave 20% going through as normal wages. My client is topping up wages for their staff to normal levels.
Unfortunately for me, I had already processed March's payroll with normal pay for all, done my P60s and closed the payroll. We decided that it's not worth all the hassle of rolling this back just to change the pay in this case.
This is an unprecedented time for all of us who work as bookkeepers and accountants and process pay for others. For a while at least, the information was changing daily on what could or could not be claimed, and for the time being, companies need to pay staff not really knowing when or how we can reclaim from HMRC.
My advice is to use the HMRC website to double-check anything you read and seek support if you are confused on what to do. Another bit of advice I'm giving clients is not to pay your VAT if you don't have to, even if you can afford to.
As the furlough pay will take a while to come through, I am recommending clients use the money they have saved from their VAT return to pay their staff, then when the furlough pay is finally claimed they can use that money to set aside to cover their VAT bill.
Many people don't want to be in debt to the HMRC, but this seems a sensible and prudent way to help with processing furlough pay and to manage your cashflow if you can.
If anything I've written here resonates with you, call me on 01604 420057 and let's see how we can help you.