Extended Job Retention Support Scheme: HMRC Guidance
The dynamic nature of the government business support measures since Spring 2020 makes it no simple task keeping up with who’s entitled to what and for how long. Throw in the pieces of guidance from HM Revenue & Customs (HMRC) and elsewhere, and the challenge becomes even greater for business organisations.
HMRC’s latest guidance documents on the Coronavirus Job Retention Scheme (CJRS), which has now been extended until March 2021, reflect the very latest developments. The Job Support Scheme has, for that reason, been put on pause for now and the related guidance withdrawn.
The raft of documents cover the range of issues arising out of the CJRS itself, for instance, which employee taxes and pension contributions must be paid and by whom; the limits to what employers can claim for; how much they must contribute.
Not all the issues are clear – which is unsurprising given the reactive and urgent nature of some of the measures – but one matter that needs to be clarified quickly relates to individuals serving out a notice of dismissal period.
At the time of writing, employers are permitted to make redundancies even if affected employees are on furlough – and may still claim the grant while the statutory notice period is being served (though grants must not be used to substitute redundancy payments).
But under the existing guidance there is uncertainty as to whether this is only for November. It is also unclear whether employees can be put on notice of redundancy if they are on furlough beyond November.
These issues need to be clarified very soon so that employers can have much-needed certainty in circumstances where they may be considering cutting their workforce during the pandemic.
Two further headline points to note include:
- Where a TUPE transfer of employees has taken place, the new employer is eligible to claim for employees of the previous business where the TUPE or PAYE business succession rules apply to the change in ownership. The guidance sets out how this operates in practice.
- Sick and or shielding employees: the guidance clarifies which employees can and can’t be furloughed if they cannot work because they are ill, shielding or because they have caring responsibilities. The CJRS is not intended to be utilised as a form of short-term sick absences, but an employee who is off sick can be furloughed if the employer has business reasons for doing so, in which case sick pay stops and they will be treated as an employee on furlough.
The guidance goes on to explain the situation if a furloughed employee then becomes sick (employees can chose whether to move them onto statutory sick pay or keep them on furlough).
Formalised agreement
Finally, an important reminder that employers must discuss the issues with their employees; and any changes to the terms of employment must be formally agreed between them and set out in writing. This should be kept for six years.
It’s also worth noting that from December, HMRC plans to publish the names of companies and LLPs (and their company registration number) who have made claims under the CJRS scheme for December and onwards. Expert advice from tax professionals is vital.
If you would like us to cover an issue in the next NGM Tax Law Newsletter, we would be pleased to hear from you