We hope you managed to have a relaxed Easter bank holiday weekend if at all possible during the current economic uncertainty. As promised before the break, please see below further updates today following further clarifications on the Coronavirus Job Retention Scheme (CJRS) issued by the Government.
Sick leave / self isolation
Previous guidance stated that employees who are self isolating or on sick leave could only be put on furlough after their period of sick leave and were no longer receiving SSP.
The guidance published on 9 April states:
“Short term illness / self-isolation should not be a consideration in deciding whether to furlough an employee. If, however, employers want to furlough employees for business reasons and they are currently off sick, they are eligible to do so, as with other employees.”
Employers can now therefore decide to furlough employees even if they’re off on sick leave or self-isolating. In these cases, SSP should be stopped and the employee would be classified as furlough and paid accordingly.
In contrast, if a furloughed employee becomes sick, the employer can place them on sick leave and pay SSP or decide to keep them on furlough leave, but cannot claim for both.
Statutory leave, including sick, maternity, paternity, adoption and parental leave
The updated guidance states:
“In line with other employees, claims for full or part time employees returning from statutory leave after 28 February 2020 should be calculated against their salary, before tax, not the pay they received whilst on statutory leave.
Claims for those on variable pay, returning from statutory leave, should be calculated using either the:
- same month’s earning from the previous year
- average monthly earnings for the 2019-2020 tax year.”
This provides clarification that the furlough pay of returners should be based on their so-called substantive pay rather than the pay they received during the period of leave.
It is now clear that this group can be furloughed. The previous conditions that “… they are unable to work from home” and that the employer “would otherwise have to make them redundant” have been removed providing clarification that there is no qualification or condition on the employer’s ability to furlough them.
The updated guidance has provided clarification that transferee businesses can continue any furlough leave started by the transferor or place transferring employees on furlough, within the rules of the scheme.
The updated guidance states:
“All the grant received to cover an employee’s subsidised furlough pay must be paid to them in the form of money. No part of the grant should be netted off to pay for the provision of benefits or a salary sacrifice scheme.”
This clarifies that the lower, post salary sacrifice salary should be used for the purposes of a claim under the CJR scheme and the employer must pay any ongoing benefits, including through a salary sacrifice scheme, itself.
No set off or deductions from pay can be claimed
The guidance confirms that any monies claimed under the scheme should be paid to employees in full, with no scope for employers to make deductions from the amount claimed.
Working for the employer during furlough
Previous guidance has made it clear that no work at all (other than training) may be done for the employer during furlough. This is now extended by a clarification that the worker cannot work for a ‘linked or associated organisation to the employer.
What you need to prepare to make your claim
Further detail has now been provided as to how employers claim under the CJR scheme. The following information should be provided:
- National Insurance Numbers for the employees you want to furlough
- names of the employees you want to furlough
- payroll/works number for the employees you want to furlough
- Self-Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number.
As was already made clear in earlier guidance, the following is also required:
- the claim period (start and end date)
- the number of employees claimed for
- employer PAYE reference number
- amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
- bank account number and sort code
- contact name
- phone number
The portal is not anticipated to be available until 20 April (at the earliest) and HMRC have said that payment will be made withing 4-6 working days of a claim, but it is likely that payments will not be made until early May.
It is also anticipated the portal will require a confirmation that the information provided is complete and accurate, and HMRC will “retain the right to retrospectively audit all aspects of your claim.”
National insurance and pension contributions
The updated guidance confirms that employer National Insurance Contributions (NICs) are paid on the furlough pay and can be recovered under the scheme. It also clarifies that employer pension contributions that are paid on the subsidised furlough pay can be recovered up to a limit . Further details of this are available in the full guidance.
The updated guidance still does not address the issue of whether annual leave may be taken during a period of furlough. It is hoped this may be addressed in further guidance updates this week.