On 13 November 2020, HM Treasury published The Coronavirus Act 2020 Functions of her Majesty’s Revenue and Customs (Coronavirus Job Retention Scheme) Direction. This is the fourth such Treasury Direction to be issued (you can view the previous Treasury Directions here). Together, the Treasury Directions form the legal framework for the Coronavirus Job Retention Scheme (CJRS).
The fourth Treasury Direction:
- formally extends the CJRS from 1 November 2020 until 31 March 2021;
- sets out the detail of how the CJRS will operate between 1 November 2020 and 31 January 2021 (fifth Treasury Direction covering February and March 2021 to be published in due course); and
- withdraws the Coronavirus Job Retention Bonus.
The main focus of the 32-page document is to address how the CJRS will operate until 31 January 2021. The rules cover a wide range of issues including: eligibility; furlough agreements; claim periods; reference salaries; calculating the usual hours of work; permitted activities during furlough; business succession (including TUPE); PAYE scheme reorganisations; time limits for making claims; and publication of CJRS claimants’ details.
For those advising on furlough it is an essential read. In the meantime, here are some key points worth noting:
- It is now a condition of making a claim that the employer accepts that HMRC will publish information about CJRS claims on the internet. This includes the name of the employer and a “reasonable indication” of the amount claimed. An exception may be made for employers who can show that publication would expose their workforce to “serious risk of violence or intimidation”.
- Furlough agreements must be in place before the start of the relevant claim period (but may be varied during the claim period). It should be sufficient to update an earlier furlough agreement, provided it is done before the employee is furloughed under this phase of the CJRS. There was a small window of opportunity for employers to backdate agreements, but this has now passed.
- Claims may not be made for any day that an employee is serving notice between 1 December 2020 and 31 January 2021 (and the latest guidance says this means both statutory and contractual notice periods).
Thanks to Amanda Steadman of BDBF LLP for preparing this case summary.