Updated guidance published on the extended Coronavirus Job Retention Scheme - UK

• United Kingdom

• Coronavirus - Workforce issues
• Employment law

11-11-2020

Recent weeks have proved a tumultuous time, not only for the continuing spread of the coronavirus, but in terms of the financial support mechanisms provided by the UK Government. As regards job support, the Government has postponed indefinitely the launch of its new wage subsidy scheme (the Job Support Scheme), cancelled the Job Retention Bonus and unexpectedly extended the Coronavirus Job Retention Scheme (“CJRS”) twice, to the 2 December 2020 and then to 31 March 2021.

Furthermore, guidance on the extended CJRS (the Guidance) has already been updated twice and a Treasury Direction regarding this slightly revised form of the CJRS has now been published. It should be noted the Guidance applies until the end of January, reflecting a Government commitment to review the policy to decide “whether economic circumstances are improving enough to ask employers to contribute more” from February.

In this Alert, we highlight significant aspects of the updated content as at 13 November 2020.

Updated CJRS guidance: points to note

Much of the Guidance will be familiar to employers. For example, as under the CJRS rules which applied until the end of October, eligible employees can be on any type of employment contract, the employer can furlough employees on a full-time or flexible, part-time basis in agreement with the employee and there are restrictions on furloughed employees doing any work for their employer.

The main points of difference in the Guidance, compared with the original is that it reflects the extension of CJRS to employees who started work during the pandemic and to employers who have not previously accessed CJRS grants, such as new payroll cut-off dates. There are also important changes, such as a restriction on employers using CJRS grants during periods of notice and the publication of the names of employers who claim under the CJRS.

The points below relate to the extended CJRS as it applies from 1 November as reflected in the latest Guidance and not to claims for periods ending on or before 31 October:

• Employee agreement: Employers may retrospectively agree furlough agreements with employees backdated to 1 November 2020, for the purposes of a CJRS claim, but only if such agreements are in place before 14 November.   
• Managing the transition: The Guidance applies for CJRS claims for periods starting on or after 1 November 2020 (the closing date for claims up to and including 31 October remains 30 November 2020, using the previous CJRS guidance). Employers can claim under the extended CJRS from 11 November 2020 and, therefore, the claim for the period from 1-11 November will be in arrears. Claims from 1 November 2020 must be submitted by 11.59pm 14 calendar days after the month claimed for (if this time falls on the weekend then claims should be submitted on the next working day).
• Devolved nations/tier status: Claims can be made by employers that meet the CJRS eligibility criteria. This is irrespective of the different coronavirus restrictions which may apply beyond the current English lockdown, such as a return to the three tier approach in England and any further firebreak in Wales.
• Employee eligibility: Employees must have been employed on 30 October 2020, and the employer must have made a PAYE Real Time Information (RTI) submission to HMRC for them between the 20 March 2020 and 30 October 2020. Previously, claims could only be made for employees who had been furloughed before 30 June 2020 and a claim submitted by 31 July 2020 and a maximum employee number applied (with some exceptions).
• Employer eligibility: A key difference is that employers do not need to have used CJRS previously with the result that some employers may be using extended CJRS for the first time. Other eligibility criteria apply.
• Pay data: How to calculate claims, including working out employees hours and pay across reference periods, will be familiar to those employers already using CJRS. However, for new employers claiming and new employees hired between 20 March 2020 and 30 October 2020 the Guidance has updated the reference pay and usual hours to take account of the period covered by the extension. A calculator can be used to work out the more straightforward claims.
• Shielding: Reflecting the change to shielding advice, the Guidance confirms that furlough is available for those who are unable to work because: they are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance; they have caring responsibilities resulting from coronavirus, including employees that need to look after children.
• Re-employing employees: As before, employees that were employed and who were made redundant or stopped working for their employer can be re-employed and claimed for. However, the date has changed reflecting the extension. Now, the employee must have been employed as at 23 September 2020 and the employer must have made a PAYE Real Time Information submission to HMRC for affected employees from 20 March 2020 to 30 October 2020 (this clarification was added on 12 November 2020). There is no obligation on an employer to re-employ such employees.
• Redundancy: During November, employers can claim for a furloughed employee who is serving a statutory or contractual notice period, however grants cannot be used to substitute redundancy payments. However, an important change now reflected in both the Guidance and the Treasury Direction is that that claims against CJRS cannot be made for any dates on or after 1 December 2020 during which a furloughed employee is serving either a contractual or statutory notice period. As such, it will no longer be possible for employers to pass notice period costs onto the taxpayer, for example were they to make staff redundant (though this restriction applies to notice pay costs in any circumstances).
• TUPE: A new employer is eligible to claim in respect of the employees of a previous business transferred if the TUPE or PAYE business succession rules apply and the employees being claimed for were employed by their prior or new employer on or before 30 October 2020 and transferred employment on or after 1 September 2020 (this correction to the Guidance wording was added on 12 November 2020).
• Employer claim transparency: From December 2020, HMRC will publish the names and other details  of those companies and Limited Liability Partnerships (LLPs) who have made claims under the scheme for the month of December onwards. The Guidance clarifies that this will include the names of employers, their company registration number (where applicable) and an indication of the value of their claims. An exception will be applied if the HMRC perceives a serious risk of violence or intimidation from publication of this information. 

This note is a generic briefing and is not a substitute for detailed legal advice on the specific circumstances employers are facing. Employers should therefore take legal advice.