16th November 2020
Further information for businesses and employees about government’s furlough scheme.
HMRC has updated its set of guidance documents on the Coronavirus Job Retention Scheme (CJRS) which has now been extended from 31 October 2020 to 31 March 2021.
On Friday 13 November 2020 HMRC also issued its fourth Treasury Direction: The Coronavirus Act 2020 Functions of her Majesty’s Revenue and Customs (Coronavirus Job Retention Scheme) Direction which:
The 32-page Treasury Direction sets out the legal framework for the CJRS and covers a wide range of issues including: eligibility; furlough agreements; claim periods; reference salaries; calculating the usual hours of work; permitted activities during furlough; business succession (including TUPE); PAYE scheme reorganisations; time limits for making claims; and publication of CJRS claimants’ details.
From 1 November 2020 the CJRS will largely operate as it did prior to the end of August 2020. However, there are some key differences between the CJRS pre- and post-extension, which include:
Other notable points from the guidance include:
Employers who have been contemplating redundancies may have welcomed the news that the furlough scheme is being extended. However, employers will need to consider how the CJRS impacts their businesses, and their plans in respect of any re-hired or potentially redundant employees, both when the scheme ends in March 2021, or when the scheme changes before then. This is particularly the case after 1 December 2020 when CJRS claims cannot be made in respect of any employee who is serving notice. Employers may therefore need to act swiftly to avoid this hampering any plans.
Many employers may also be reluctant to use the scheme after hearing the news that their CJRS claims will now be published. Employers will need to consider how this may impact their business.
The government has signalled that further changes will be made to the CJRS in a fifth Treasury Direction. Therefore, while the continuation of the scheme may have provided welcome relief to many employers and employees, there is still a lot of uncertainty about the level of support the scheme will provide in the coming months.
Please note: Nothing in this article constitutes legal advice and we are not liable for any reliance on the information provided. This is a rapidly changing subject, and whilst correct at the time of writing, circumstances may have changed since publication. Please refer to Gov.uk for up-to-date advice on the Government’s response to this issue.
To find out more about anything covered in this article, or to discuss the potential impact of COVID-19 on your business, please contact Kerrie Hunt or another member of Thrings’ Employment and Immigration team.