I got less then minimum wage for furlough pay

unforeseen

Congratulations, you've just found out that they way that agencies/umbrellas organise your pay to minimise tax has the same effect for CJRS as tax/dividends for Ltd Cos.

Uberbeck

diggingdude said:

That is approx £1148 a month before taxes.  Why are you thinking you should have minimum £2500?

Because my earnings before pandemic is more than 3k a month.

Uberbeck

Grumpy_chap said:

Is your contract of a 'zero hours' type?  That could account for the minimum wage approach if the agency has nothing to claim from a Client.
You are correct that the claim would be for the 80% plus NIC and statutory pension, so the latter two should not be deducted from you as well.  All that said, how does the agency cover their costs in all this?

Yes it is a zero hour type deal but I have always had regular work, my employer is the umbrella company. I still feel that the minimum wage is due to them declaring my income to HMRC as 5k a year (which is very wrong). I have heard however that there are other agency worker who are also being paid minimum wage.

Uberbeck

unforeseen said:

Congratulations, you've just found out that they way that agencies/umbrellas organise your pay to minimise tax has the same effect for CJRS as tax/dividends for Ltd Cos.

I am not a Limited company, I am an employee who gets paid through PAYE. 

Jeremy535897

There is something wrong here. If your pay varies, the amount your employer can claim under CJRS is as follows, if you were employed throughout 2019/20 by them:

"Employees whose pay varies and were employed from 6 April 2019

If the employee has been employed continuously from the start of the 2019 to 2020 tax year, you can claim the highest of either:

• 80% of the same month’s wages from the previous year (up to a maximum of £2,500 a month)
• 80% of the average monthly wages for the 2019 to 2020 tax year (up to a maximum of £2,500 a month)

To calculate 80% of the same month’s wages from the previous year:

1. Start with the amount they earned in the same period last year.

2. Divide by the total number of days in this pay period - including non-working days.

3. Multiply by the number of furlough days in this pay period.

4. Multiply by 80%.

Find an example of claiming for the same period last year.

To work out 80% of the average monthly wages for the last tax year:

1. Start with the amount they earned in the tax year up to the day before they were furloughed.
2. Divide it by the number of days from the start of the tax year – including non-working days (up to the day before they were furloughed, or 5 April 2020 – whichever is earlier).
3. Multiply by the number of furlough days in this pay period.
4. Multiply by 80%.

Find an example of working out 80% of average monthly wages for the last tax year."

From https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme

Your employer is obliged to pay you at least as much as they claim from HMRC. Your employer also has to calculate what they can claim correctly (although reasonable alternatives are accepted) or their CJRS claim should be denied. Their claim includes employer pension contributions and employer NIC, so they cannot deduct these from your pay.

 You also say "Prior to this pandemic they declared very little taxable income that I received and also have taken considerably more tax off of me than they have declared to HMRC." This could cause you problems if you complete a tax return. It is also potentially fraudulent.

Uberbeck

Hi thanks for your reply Jeremy, yes I have already reported my employer to HMRC over fraud and had to complete a tax return based on my payslips. My real problem I guess is that I have no way of knowing if they are skimming money off me on the furlough pay as well, HMRC can't tell me how much money my employer has received.

unforeseen

Uberbeck said:

unforeseen said:

Congratulations, you've just found out that they way that agencies/umbrellas organise your pay to minimise tax has the same effect for CJRS as tax/dividends for Ltd Cos.

I am not a Limited company, I am an employee who gets paid through PAYE. 

I didn't say you were limited. The agency are using creative accounting to keep the NI and tax bill low. Pay the worker NMW and the rest of the employees pay is made up of a 'bonus' or similar. This results in the RTI record only showing that you get NMW as far as CJRS is concerned. 

Jeremy535897

Uberbeck said:

Hi thanks for your reply Jeremy, yes I have already reported my employer to HMRC over fraud and had to complete a tax return based on my payslips. My real problem I guess is that I have no way of knowing if they are skimming money off me on the furlough pay as well, HMRC can't tell me how much money my employer has received.

No, you can't find out what they are claiming in respect of CJRS, but you can point out to HMRC that the law requires the employer to hand over all they claim for your net wages to you, and you fear they are not doing that. It may be as @unforeseen says, that they are failing to include payments they describe as "bonus", although that is not creative accounting. It is fraud.

Uberbeck

unforeseen said:

I didn't say you were limited. The agency are using creative accounting to keep the NI and tax bill low. Pay the worker NMW and the rest of the employees pay is made up of a 'bonus' or similar. This results in the RTI record only showing that you get NMW as far as CJRS is concerned. 

Yes but what they doing is illegal and I still have had to have 33% taken off of me and it not handed over to HMRC. It is not a tax avoidance scheme no healthcare agency worker is IR35 compliant any more, they are tax evading and pocketing my cash. 

yksi

Facepalm... people, pay attention. Earning 3000 per month is not a fulltime minimum wage. It's way over minimum wage. The employer is probably pretending the OP is a 40h/minimum wage earner and only declaring that amount to HMRC, so that they could keep the extra tax they have deducted. But when the pandemic hit they were unable to suddenly admit that his earnings were much, much higher (so of course, the furlough application lied and said he was on minimum wage).

This is not really an incorrect furlough calculations issue that you have, it's a pure tax fraud issue (and the horrible end result is that they are severely underpaying you). You need to be in direct contact with HMRC about the fact that they're defrauding the government and now subsequently have claimed furlough incorrectly for you. You could send a letter to the employer saying that based on your earnings over the past 12 months your pay should have been X and you expect them to rectify the missing pay within 7 days, but I doubt that will actually make them pay you correctly, unless you also add that you will be in contact with HMRC over the large amount of missing furlough money.