16th April 2020

BREAKING NEWS: Updated Guidance for Job Retention Scheme

Updated guidance

Yesterday the Government issued further guidance in relation to furloughing and the COVID-19 Job Retention Scheme. The updated guidance is HERE however the following has been clarified:

  • The qualifying date has been changed from 28 February 2020 to 19 March 2020. This means that a large number of people who fell outside the scheme will now potentially be able to be furloughed.
  • The guidance provides that such employees must be entered on their PAYE payroll via a Real Time Information (RTI) submission by that date. It will not cover individuals who may have joined pre-19 March 2020 but who were not put on the PAYE system until later that month.
  • The scheme is currently set to run until 1 June 2020 but may be extended.
  • The HMRC weblink will be available and operational from 20 April 2020. HMRC has today suggested that, assuming the correct details are submitted by the employer, it can expect to get paid within six days of receiving the claim – three days to check the genuineness of the claim and three days for BACS payment.
  • It has been re-affirmed that employers are not limited to only furloughing those employees who would otherwise have been made redundant. This scheme also applies to any employees who are furloughed “by reason of circumstances as a result of a Coronavirus or Coronavirus disease.” This essentially means that those whose ability to perform their role (or whose work levels have been impacted) can been furloughed and their employers can claim under the scheme.
  • It has been clarified that employers cannot reclaim any payments which are not part of their employees’ regular salary or wages. This includes any performance-related bonus or discretionary payments, including tips.

Change to the guidance
In an important change, employees must have agreed in writing that they will cease all work in order to claim the grant. Previously the guidance had been that employees should be notified by the employer that they were not required to work.

HMRC weblink details

If you wish to submit your claim online to HMRC, remember that you are required to have the following information to hand:

  • Your employer PAYE reference number.
  • The number of employees being furloughed.
  • Names and national insurance numbers for the furloughed employees.
  • Payroll/employee number for the furloughed employees.
  • Your self-assessment unique taxpayer reference/corporation tax unique taxpayer reference/company registration number.
  • The claim period (start and end dates) and the amount claimed (per the minimum length of furloughing of three consecutive weeks).
  • Your bank account number and sort code.
  • Your contact name and phone number.

Annual leave and furlough workers

The guidance remains silent around the issue of annual leave. The common view (and as evidenced by my colleague Duncan’s recent twitter poll) is that employees should be permitted to take holiday pay and be paid 100% of normal pay for such leave. However further clarification is required before this can be relied upon by employers.

Three takeaway tips

If you want to be first in the queue to get paid under the Job Retention Scheme, you should:

  • Calculate the sums claimed correctly now, rather than waiting until the weblink becomes operational next week. Remember that, although the national minimum wage increased in April 2020 to £8.72 for workers over 25 years old, depending on the calculation method, your employees may not receive the national minimum wage during their period of furlough.
  • Ensure that your employees are all eligible to claim under the scheme. Again consider the recent guidance issued yesterday, particularly in relation to the qualifying date. Remember that if your PAYE scheme is not online, then you cannot be paid by HMRC.
  • Retain a paper trail. It is imperative that you keep good records of your employees agreeing to be furloughed. If you haven’t got your employees’ consent in writing, then this must be obtained before you can claim. This communication should be kept for a period of five years.

If in doubt about the above, please contact your own solicitor or a member of the Blackadders’ employment team.

Simon Allison, Partner
Employment Law
Blackadders LLP
@EmpLawyerSimon

 

www.blackadders.co.uk

 

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