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16 April 2020


HMRC Update on the Coronavirus Job Retention Scheme

Posted by: Russell Brown

Yesterday under the Coronavirus Act 2020, the Treasury issued a direction to HMRC for making payments under the Coronavirus Job Retention Scheme, the key points being:

  • Confirmation that the CJRS applies to anybody who is furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease”. It is not therefore limited to those who would otherwise need to be laid off or made redundant.
  • Anyone employed on 19th March will be eligible for furlough, provided that their employer had submitted RTI payroll data for PAYE purposes by that date.
  • To claim furlough, the employer and employee must have agreed in writing that the employee will cease all work. The guidance originally only required employees to be given “notification” of being furloughed. The direction however requires “written agreement”. Most employers’ furlough agreements will contain some provision confirming agreement between them and the employer but if they don’t, the employee may not have been furloughed.
  • We now have an interpretation of the duties which furloughed directors are able to perform, which amount to undertaking work to fulfil 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 the administration of the director’s company.
  • When calculating salary, employers must exclude anything which is not “regular salary or wages”. This means an employer must exclude any performance related bonus or discretionary payments, any conditional payments and any non-financial benefits.
  • Employers can claim for earnings which they “reasonably expect to be paid” to the employee. This might cover salary which an employer agrees with an employee to defer until the grant is received from HMRC. However, employers cannot claim for any salary which is “conditional on any matter” which will potentially exclude any salary which it has been agreed will be paid on the condition of HMRC paying out under the CJRS.

Russell is a Partner and Head of Glaisyers' Employment Team.

Russell Brown - Partner

To discuss how Glaisyers can assist you contact Russell Brown on or via 0161 832 4666.

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