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Extended CJRS: Updated HMRC guidance published

11 November 2020
The much anticipated updated HMRC guidance has been published providing the detail on the extended Coronavirus Job Retention Scheme (CJRS). Read our insight for more details.

As outlined in our Legal Update the CJRS will remain open for a further five months until the end of March 2021.   From 1 November 2020 to 31 January 2021 the government will pay 80% of wages for hours not worked up to £2,500 per month. Flexible furlough, where employees can be asked to work some hours, continues to be allowed and any work pattern is permitted. Employers will be asked to pay employer National Insurance and pension contributions on all furlough pay as well as the usual deductions on pay for hours worked.   In January 2021 the CJRS extension will be reviewed to examine whether economic circumstances are such that employers will be asked to increase contributions.  

As promised the government has updated the CJRS guidance.  

Key resources 

Collection - HMRC guidance on CJRS (this page links to the key guidance documents however there is additional guidance set out below) 
Check if you can claim for your employees' wages through the CJRS  
Check which employees you can put on furlough to use the CJRS
Claim for wages through the CJRS 
Check if your employer can use the CJRS 
Other types of employees you can claim for
Steps to take before calculating your claim using the CJRS
Calculate how much you can claim using the CJRS 
Reporting employees' wages to HMRC when you've claimed through the CJRS 
Examples of how to calculate your employees' wages, National Insurance contributions and pension contributions
Full examples of how to calculate the amount you should claim for an employee who is flexibly furloughed  
Pay Coronavirus Job Retention Scheme grants back 
Guidance on shielding and protecting people who are clinically extremely vulnerable from COVID-19 
Holiday entitlement and pay during coronavirus (COVID-19) (this has not been updated but provides a useful reference for employers)

As before the guidance provides a multitude of worked examples and steps employers must take before submitting a claim.  

Highlights from the guidance include:

Notice under the CJRS - Under the updated guidance the government states that it is "reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November."  This would amount to a significant change for employers.  Employers which were hoping to rely on the CJRS to cover notice periods will need to carry out an urgent review.  This warning may lead to a number of employers in financial difficulties serving notice before 1 December 2020 and terminating employment earlier than planned to ensure they can use the CJRS to cover the notice period. The uncertainty in the guidance is unhelpful. 

Maximum number of employees which can be furloughed - There is no maximum number of employees you can claim for from 1 November 2020.  For employers claiming for a period that ended on or before 31 October 2020, the amount which can be claimed for in any single claim period starting from 1 July 2020 cannot exceed the maximum number of employees claimed for under any claim ending by 30 June 2020.  This amendment represents a more generous version of the CJRS. 

Sick leave and clinically extremely vulnerable people – The guidance sets out when a sick or isolating employee can be furloughed and the interaction with Statutory Sick Pay (SSP).  As before, employers are given some degree of flexibility when choosing whether to furlough sick employees or to move them on to SSP.  The guidance is complex and at times appears contradictory.  If you need advice with regard to the CJRS and sickness we can assist.  

The shielding and clinically extremely vulnerable guidance has also been updated to reflect the extension of the CJRS.  Those who have been identified as clinically extremely vulnerable have been strongly advised to work from home.  Where they cannot work from home, they should not attend work for the current lockdown period in England.  The guidance states that this group may also be eligible for the extended CJRS. 

Naming employers which claim under the CJRS – As set out in the government Factsheet HMRC will publish details of employers which make claims.  The latest guidance states that "From December 2020, HMRC will publish employer names [and] for companies and Limited Liability Partnerships (LLPs), the company registration number of those who have made claims under the scheme for the month of December onwards".  HMRC will undoubtedly hope that by creating a more transparent system the number of fraudulent claims will reduce. 

Employee Agreement  and records – Employers must have in place an agreement with their employees in relation to the extended scheme and as before that agreement must be in writing and retained for five years (for further detail please see the guidance).  There is no requirement for written acceptance. In relation to retrospective agreements, these must have been put in place up to and including the 13 November 2020 in order to be relied on for the purposes of a CJRS claim.  Claims can be submitted for the period from 1 November 2020 from 8am on 11 November 2020. All claims for November will need to be made by 14 December 2020 and given the dates for payroll runs this leaves very little time for many businesses to organise their submissions. Records of hours worked and hours furloughed must be kept for six years (for further detail on records please see the guidance).

Conclusion 

The CJRS guidance is long and complex.  It is key for employers to get to grips with the technicalities of the extended support and the worked examples should assist with this.  Employers will need to ensure that they have clear, accurate records and robust furlough agreements in place in order to mitigate the risk of an HMRC fraud investigation.  Employers seeking to rely on previous furlough agreements should take the opportunity to revisit them to ensure the agreement is as flexible as possible, in line with the revised guidance and that the long stop date is consistent with the extension of the CJRS to 31 March 2020.  

If you need any assistance with the issues raised please do not hesitate to contact a member of the UK employment team. 

Further Reading

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