Tips

Accounting for Job Retention Scheme Income

Under the Coronavirus Job Retention Scheme, all UK employers can access support to continue paying part of their employee’s salary for those employees who would otherwise be laid off during this crisis.

Creating new Nominal Codes to record GrantsSage recommend creating the following new nominal codes to record when you make Job Retention Scheme claims and when the grants are received, unless otherwise advised by your accountant.

 

Nominal                       Name                           Management                Category

Code                                                                Report 

1150 or next                  Job Retention Sche        Balance            Debtors

available code               -me Accrued Income      Sheet

 

4950 or next                  Job Retention Sche        Profit and                      Other Sales

available code               -me Grant Received       Loss

 

1. On the Navigation bar click Nominal codes then click New/edit.
2. Complete the Nominal Record window as follows:

N/C       Enter the nominal code you want to create, for example, 1150.

Name   Enter the name of the account, for example, Job Retention Scheme Accrued Income.

3. Click Save then click Close.
4. Repeat this process to create the second nominal code.

If not already included, you must add your new nominal codes to your existing chart of accounts.  If preferred you can show coronavirus grants as a separate category on your Profit and Loss.

Record grants claimed

There is no change on how you record your payroll postings in Sage 50 Accounts and you can continue to run your Nominal Link or post salary journals as normal.

We will use the following example

• The company makes a claim for £10,500 on 14^th April 2020
• No grant has yet been received.
• Use T9 as most grant income will not attract a VAT liability.

 

1. On the navigation bar click Nominal Codes then click Journal entry.
2. In Reference, enter a reference, then in Posting Date enter the date of the claim
3. Enter the following information to record the accrued income.

 

N/C       Name                           Details              T/C       Debit                Credit

1150     Job Retention Sche        Job Retention    T9        10,500.00

-me Accrued Income      Scheme claim

 

4950     Job Retention Sche        Job Retention                T9                                10,500.00          -me grant received            Scheme claim

 

4. Click Save then click Close.

 

Record grant received

 You should record grants received as a bank receipt to the Job Retention Scheme Accrued Income Nominal code.

We will use the following example

• A government grant for £10,500 on 24^th April 2020
• The grant is received into the company current account, nominal code 1200.
• Use T9 as most grant income will not attract a VAT liability.

 

1. Click Bank accounts, click Receipts then click bank receipts.
2. Complete the Bank receipts window as follows:

 

Bank    Date                 N/C       Details               Net                  T/C       Tax

1200     24/04/2020        1150     Job Retention                10,500.00          T9        0.00

Scheme Accrued

Income

3. Click Save then click

If you would like help setting up new nominal codes, including nominal codes in your Chart of Accounts, entering journals, grant income etc. or need any other help etc or would like a quote or to purchase an upgrade please contact us