16 April 2020
HMRC have provided further guidance on their Coronavirus Job Retention Scheme (CJRS) and a number of specific applications. The guidance, which was initially published on 26 March 2020, has since been updated three times with the latest update being released on 15 April 2020 around the ‘cut off’ date for eligible furloughed employees. The application of the scheme for employees on sick leave or parental leave, and also for TUPE staff was expanded upon in an earlier update on 9 April 2020.
The guidance also looks at the ability of tax agents to make claims on behalf of their clients, which we address further below.
Change to the qualifying date
The ‘cut-off’ date for eligibility for the scheme has been moved forward from 28 February 2020 to 19 March 2020. Further guidance clarifies that employers can only claim for furloughed employees who were on the payroll on or before 19 March 2020 and which were notified to HMRC on an RTI submission on or before 19 March 2020.
The requirement that furloughed employees must have been notified on an RTI submission is new guidance, as the previous guidance was silent on this point.
Employees who were employed as of 28 February 2020, were on the payroll as of that date and who were notified to HMRC on an RTI submission on or before 28 February 2020, can be re-employed if they were previously made redundant or stopped working for the employer after that date and prior to 19 March 2020. In those circumstances, re-employed individuals can be placed on furlough and will qualify for the scheme.
There is also confirmation that if an employee has had numerous employers over the past year, only worked for one of them at any given time and is being furloughed by their current employer, any former employer(s) should not re-employ them to place on furlough and claim wages through the scheme.
Furlough and sick leave
The original guidance regarding sick leave has been expanded to explain the interaction between furloughing staff and sick pay. It is important to note that the CJRS should not be used to furlough employees absent for short-term sickness or those self-isolating due to Covid-19, particularly given that it has a minimum furlough period of three weeks. However, if there are sound business reasons for furloughing a member of staff currently on SSP for those reasons, they can be moved from SSP to furlough pay.
If an employee is shielding as a result of Covid-19, or is on long-term sick leave, they can be furloughed. For any furloughed employees who become sick, they can continue on furloughed pay, but must be paid at least SSP. It is down to you as the employer to determine whether to retain them on furloughed pay or move them to SSP. It is possible to claim the CJRS grant and SSP for the same employee, but not for the same period.
Employees returning from leave
If you are looking to furlough any employees returning to work from the various forms of maternity, paternity, adoption or shared parental leave, you are able to claim through the scheme, but the claim should be based on the employee’s salary, rather than the pay they received while on leave.
Claims for TUPE staff
If you transferred employees from another business into your own after 19 March 2020, and the TUPE or PAYE business succession rules apply with regard to the change in ownership, you are able to furlough and claim for those employees under the scheme. This also applies for groups of companies transferring employees from more than one payroll into a consolidated scheme after 19 March 2020.
Agents
The latest issue of the guidance on CJRS sets out that agents authorised to act for PAYE purposes on behalf of their clients will be able to make claims on their behalf. However, this excludes file-only agents and, importantly, payroll bureaus. As many of our UHY offices provide this form of payroll service to clients, we have been looking into methods that would enable us to make these claims on behalf of our clients and believe we have found a workable solution.
Treasury Direction
The detail around the CJRS has finally been published in the Coronavirus Act 2020 which should provide clarity over a number of matters which have previously been open to interpretation.
If you have any queries in relation to the CJRS and its application to your business, or would like support in determining how to make grant claims, please speak to your usual UHY adviser.
