COVID-19: Employment Bulletin – Coronavirus Job Retention Scheme (CJRS) – update 16 April 2020
Information correct as at 16 April 2020
Please refer to our Employment Bulletin articles for the latest updates.
Update: Coronavirus Job Retention Scheme (CJRS)
On 15 April 2020, the Government again revised its CJRS guidance and the Treasury has issued a formal Direction to HMRC under its powers under the Coronavirus Act 2020, giving HMRC instructions on how the CJRS is to be applied.
Here is a brief outline of some of key changes and updates from HMRC guidance:
- Employers can now make a claim for furloughed employees that are on their PAYE payroll system on or before 19 March 2020. In order to claim, the employer must have submitted to HMRC real time information of their payroll data on or before 19 March 2020.
- The CJRS is open to employers that have furloughed employees due to circumstances arising as a result of Coronavirus and is therefore not just limited to those employees that would have been made redundant but for the CJRS.
- The Direction issued by the Treasury to HMRC now confirms that in order to furlough employees under the CJRS, the employer and employee must agree in writing that the employee will cease all work. The Treasury has confirmed to HMRC that agreement in writing may be in an electronic form such as an email. Employers should therefore ensure they have obtained agreement in writing from their employees to be furloughed. A record of this communication should be kept for five years.
- Directors who have furloughed under the scheme can undertake limited work to fulfil certain statutory duties in relation to the filing of company accounts or the provision of other information relating to the administration of the director’s company.
- Employees on sick leave or self-isolating as a result of Coronavirus will be entitled to SSP (14 days can be reclaimed by employers). Furlough leave is not intended for short term absences from work due to sickness but there might be business reasons for an employer to want to place an employee who is on sick leave on furlough, in which case they are eligible to do so. However, caution should be exercised as the Treasury’s Direction to the HMRC suggests that the period of furlough does not begin until the period of statutory sick pay has ended.
- The Treasury has confirmed in is Direction to HMRC, that the amount of salary or wages that can be claimed, must be regular in nature. The Treasury has stated that regular salary or wages means an amount that arises from a legally enforceable agreement, understanding, scheme, or transaction (“Legal Contract”) and which:
- does not vary according to performance or discretion except where the variation in amount arises from a Legal Contract;
- is not conditional on any matter; and
- is not a benefit of any other kind.
This means that discretionary or performance related payments, conditional payments (where a threshold/target/condition must be met) and benefits in kind are not included.
This update is correct as at 16 April 2020. Please also refer to Frequently Asked Questions article published on 15 April 2020.