Job Retention Scheme: Updated Government and HMRC Guidance

Kathryn HirstKathryn Hirst |  Partner
Employment / Commercial

The Job Retention Scheme live on 20 April 2020 as promised by the Chancellor and over 140,000 business registered on the first day. 

There have been some important changes to the Job Retention Scheme and updates since our last article.

 Here’s what has changed:-

  • Job Retention Scheme:
    • is now open and employers must claim through the online portal (accessible on the Government website).
    • has been extended from 31 May 2020 to the end of June 2020.
  • Employees that were on payroll on or before 19 March 2020 can now be furloughed (previously, 28 February 2020).
  • The guidance has confirmed that a new employer is eligible to claim under the Job Retention Scheme in respect of the employees of a previous business who transferred after 19 March 2020.  If either the:
    • TUPE; or
      PAYE business succession rules apply to the change in ownership.
  • The Government Employee’s Guidance now states that it is possible to take annual leave while on furlough, but the employer will have to ‘top up’ to 100% of normal pay.
  • If an employee would usually take bank holidays as leave, then the Employer should either top up the holiday pay in this period or allow this as holiday in lieu.
  • There has now been a Treasury Direction issued to HMRC which contains authority and instructions to HMRC for making payments. The Direction states:
    • that to claim furlough, the employer and employee must have agreed in writing that the employee will cease all work. ( This is slightly different to the guidance which merely refers to an agreement in writing confirming that the employee has been furloughed).
  • Under the Job Retention Scheme the Direction also gives a very narrow interpretation for what Company Directors can do when furloughed compared to the guidance. It states:
    • they can only undertake 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.

We want to let you know that we are here, if you require any further information our Employment Team  can offer advice or guidance during this period of great uncertainty.   Please call us on 01603 751926 or email [email protected]