TREASURY DIRECTION – HMRC
The Treasury has issued a Direction to HMRC under powers issued by the Coronavirus Act 2020 to make the relevant payments due under the Coronavirus Job Retention Scheme. This will be the definitive guide on how the Job Retention Scheme works.
At the same time, there are a number of significant points of clarification and a change to the start date for which employees can be claimed, which I highlight here. The full direction document: CJRS DIRECTION
employees who were employed on 19 March 2020 (previously 28 February 2020) are eligible for furlough, provided the employer had submitted real time information payroll data by that date – the scheme is open to all UK employers that had a PAYE scheme in place on 28 February 2020;
the Scheme is not limited to those employees who would otherwise be made redundant. It is applies to any who are furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease”;
to claim furlough, the employer and employee must have agreed in writing that the employee will cease all work ie: you must have a written agreement with the employee if you haven’t already;
the amount of salary for the employee must disregard anything which is not “regular salary or wages”. That includes disregarding any performance related bonus or discretionary payments (including tips), any conditional payments (eg where a threshhold must be met) and any non-financial benefits;
the employer cannot claim for any salary which is “conditional on any matter” (para 7.4(b)). This may exclude any salary payments which the parties have agreed are conditional on the Job Retention Scheme paying out.
the employer can claim for earnings which it “reasonably expects to be paid” to the employee.
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