Important Updated 14/04/20: Here are the changes, for Employers
Under the new Coronavirus Act 2020 there have been some updates from The Treasury Direction to HMRC on how the Coronavirus Job Retention scheme will work.
On 20 April 2020, HMRC Portal went live, for businesses to make claims.
On 17 April 2020, HM Treasury has announced that The Coronavirus Job Retention Scheme (also known as The Furlough Scheme) has been extended (from 31st May) to the end of June, to reflect the extension of the lockdown period announced this week.
On 16 April 2020, The government announced that LOCK-DOWN would continue for a further 3 weeks.
On 15th April 2020, The Treasury issued a Direction to HMRC under powers conferred by the Coronavirus Act 2020, containing authority for making payments under the scheme.
HMRC have also updated the guidance on the Coronavirus Job Retention Scheme for the 4th time.
Another significant change is, the date an employee needed to be on PAYE payroll, has changed from 28th February 2020 to 19th March 2020.
This change means that employers may be able to include employees on the Job Retention Scheme that previously may have been excluded, such as employees who started between 28th February 2020 and 19th March 2020, as long as you have submitted Real-time payroll data prior to the 19th March 2020.
Along with this update, the Government has also published Legislative details for the Job Retention scheme. The highlights of these include:
- employees who were employed on 19 March 2020 (previously 28 February 2020) are now eligible for furlough, provided the employer had submitted ‘real-time information to payroll’ data by that date.
- the Scheme is not limited to those employees who would otherwise be made redundant. It applies to any who are furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease”, so this could be a reduction in work or economic reasons.
- a director who is furloughed can only undertake work to fulfill a duty or other obligation arising from an Act of Parliament relating to the filing of company’s accounts or provision of other information relating to purely the administration of the director’s company. This is a very narrow interpretation of directors’ duties and it does not say Directors who are Furloughed can do other activities like emailing customers for example.
- to claim furlough, the employer and employee must have agreed and the employee confirm in writing that they will cease all work. This is significant; the guidance before only required notification. The Direction from the Treasury requires written agreement. So please check that you have used our Furlough Scheme Agreement and got it signed by your employees, otherwise any employees who have already been furloughed without written agreement, may not fall within the meaning of the Scheme and you may not be able to claim for them.
- the amount of salary for the employee must disregard anything which is not “regular salary or wages”. That includes disregarding any performance related bonus or discretionary payments (including tips), any conditional payments (e.g. where a threshold must be met) and any non-financial benefits.
- the employer cannot claim for any salary which is “conditional on any matter”. This may exclude any salary payments which the parties have agreed are conditional on the Job Retention Scheme paying out.
- the employer can claim for earnings which it “reasonably expects to be paid” to the employee (- that seems to include deferred earnings, deferred until the Scheme pays out (provided they are not conditional on the Scheme paying out).
- Annual Leave on Furlough? – the guidance for Employers does not mention annual leave BUT the guidance for Employees has been updated at (17/04/20) to say that Employees can take annual leave while on Furlough but current advice is that the Employer should pay them at 100% of salary for the annual leave.
We are fully operational with our team working from home and available on telephone, email and video call to provide the support and advice you need at this challenging time.
Should you need specific advice and support with the interpretation of the latest updates and or the complexities of how to apply statutory holidays, annual leave or sickness absence etc, please utilise Park City’s team to help you.
If you have any questions please do get in touch.
Please keep safe and well, Park City Consulting.