|HMRC has issued new and updated guidance on the Coronavirus Job Retention Scheme (CJRS), which is due to start accepting applications on Monday (20 April 2020). The Chancellor of the Exchequer has also announced that the CJRS is to be extended until the end of June. This follows concerns that if the scheme closed on 31 May 2020, as originally intended, employers would need to start the 45-day consultation period on 18 April in respect of any collective redundancies that would ensue. |
Among the updated documents is the fifth version of HMRC’s guidance for employers. In their fourth iteration, from 15 April, HMRC confirmed that the payroll eligibility date for the scheme had been brought forward. Now, employees on the payroll by 19 March 2020 can be claimed for under the scheme; not the previous cut-off of 28 February 2020.
The latest version, published on 17 April, confirmed the Chancellor’s announcement that the scheme will now be open for four months from 1 March 2020 and may be extended further. Among other changes, the guidance for employers attempts to clarify how an employer can go about placing an employee on furlough. It states that employers must ‘confirm in writing to their employee’ that they have been furloughed, and that ‘if this is done in a way that is consistent with employment law’ then that will constitute valid consent for the purpose of the scheme.
The HMRC guidance goes on to say that ‘the employee does not have to provide a written response’. Unfortunately, this appears to conflict with the Treasury Direction to HMRC, published on 15 April, which was made under s.71 and 76 of the Coronavirus Act 2020. It is therefore advisable that you obtain your employees’ agreement to be furloughed via email at least, to satisfy the requirement to obtain consent to being furloughed in writing.
The separate HMRC guidance for employees has also been updated on 17 April. Among other things, this document includes the first HMRC guidance on the question of annual leave during furlough, although this topic is still not covered in the guidance for employers. The guidance for employees states that workers continue to accrue annual leave while on furlough, and that they are entitled to take leave during this time. It goes on to state that holiday pay should be ‘your usual holiday pay in accordance with the Working Time Regulations 1998’, and that ‘employers will be obliged to pay the additional amounts over the grant’.
This suggests that where furlough pay is 80% of normal wages, the employer will be required to make this up to 100% of normal (i.e. pre-furlough) wages for any period of annual leave. The guidance does clarify that employers have the flexibility to restrict when leave can be taken if there is a business need. HMRC has also published two new guidance documents. One is a ‘step by step’ guide for employers on how to claim under the CJRS, setting out the information that they will need to provide and the processes they will need to follow. The other is a guide to calculating 80% of an employee’s wages for the purpose of claiming under the CJRS.
This includes guidance on which payments can be taken into account (e.g. ‘regular wages’, non-discretionary overtime, non-discretionary commission payments) and which cannot (e.g. tips, discretionary bonuses, discretionary commission payments, non-monetary benefits).
HMRC guidance for employers: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
CJRS extension: https://www.gov.uk/government/news/chancellor-extends-furlough-scheme-to-end-of-june
Treasury Direction: https://www.gov.uk/government/publications/treasury-direction-made-under-sections-71-and-76-of-the-coronavirus-act-2020
HMRC guidance for employees: https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme
Step-by-step guide: https://www.gov.uk/government/publications/coronavirus-job-retention-scheme-step-by-step-guide-for-employers
Guide to working out 80% of wages: https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme
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