By Nic Hart
Whilst I am very mindful of furlough fatigue, there have been further updates to the Government Guidance on The Coronavirus Job Retention Scheme – both How to Claim (short form and long form) and the Guidance. None of these have substantively changed but there are points to note in each, which are as follows.
The How to Claim (short form) deals with some of the practicalities of claiming. For those yet to do so please note that you need to submit your claim in one session – you cannot save it and return later. Sessions will time out after 15 minutes of inactivity.
There has been guidance given on what steps to take following a claim;
- keep a copy of all records, including:
- the amount claimed and claim period for each employee
- the claim reference number for your records
- your calculations in case HMRC need more information about your claim
- tell your employees that you have made a claim and that they do not need to take any more action
- pay your employee their wages, if you have not already.
It must be stressed that Employers should record and retain documentation at all stages of the furlough process, both to be compliant with the requirements of the Treasury Direction but also to ensure that if there is any audit undertaken by HMRC they have the requisite records set out in the Guidance.
Please note that whilst HMRC are aiming to make payments within 6 working days, they have requested that Employers only get in touch if “it has been more than 10 working days since you made the claim and you have not received it in that time.”
The long form Guidance has added further clarification on claim periods and now states;
- It is for you to decide the length of your claim period. In deciding what your claim period is, you should think about how frequently you run your payroll. The length of claim period will be different for different employers.
- You cannot make more than one claim during a claim period – this means you should include all of the employees that you want to furlough for that claim period, because you will not be able to make another claim for the same period or one that overlaps.
- You must claim for all employees in each period at one time – you cannot make changes to your claim. It is not possible to amend a claim once it is submitted. HMRC are looking to develop a process to allow for amendments to be made.
Finally, the updated Government Guidance – 23rd April 2020 has not substantively changed but there is further clarification regarding fixed term workers and a table of which employees can claim as set out below;
|Was the employee employed with you as of this date?||Date RTI submission notifying payment was made to HMRC||Eligible for CJRS?|
|28 February 2020||On or before 28 February 2020||Yes|
|28 February 2020||On or before 19 March 2020||Yes|
|28 February 2020||On or after 20 March 2020||No|
|19 March 2020||On or before 19 March 2020||Yes|
|19 March 2020||On or after 20 March 2020||No|
|On or after 20 March 2020||On or after 20 March 2020||No|
There has also been addition to the Family leave clause regarding employees who started their family-related statutory leave on or after 25 April 2020.
Please see below the Government Guidance for those employees who started their family-related statutory leave on or after 25 April 2020.
These rules apply where the employee’s period of family-related statutory pay begins on or after 25 April 2020.
If your employee was on furlough and you paid them with help from the CJRS during any part of the relevant 8-week period, there are different rules about how you work out their AWE.
This is to make sure your employee’s eligibility for SMP and earnings-related rate of SMP is not affected if their wages are lower than normal because of being furloughed.
The earnings used to work out their AWE for the part of the 8-week period that they were furloughed will be the higher of either what they:
- actually received from their employer
- would have received from their employer had they not been on furlough
Where it is not clear what the employee would have received, a helpful starting point is the reference salary used to determine how much you can claim through the CJRS. You can find guidance on working out 80% of your employees’ wages through the CJRS scheme.
You should also consider payments the employee was due to receive in the relevant period that would have been classed as earnings. This could include:
- bonus payments
- commission payments
No changes to how you work out their AWE will be needed where:
- you’re claiming the employee’s wages through the CJRS but you’re topping them up to full pay at your own cost – the employee’s earnings will not be lower than they would have been
- as a result of the coronavirus crisis, during the relevant period you agreed a reduction in pay with your employee outside of the CJRS
For More Information
Please do not hesitate to get in touch with Nic Hart, Liam Hutton, or another member of the Duane Morris London Team.