The Chancellor has made a further Treasury Direction in relation to the Coronavirus Job Retention Scheme (CRJS) which has been published today.
The Direction formally implements the rules in relation to the CJRS which will apply from 1 July and which were previously detailed in the updated HMRC Guidance published on 12 June 2020 – you can access our previous Be Aware post on the updated Guidance here.
As anticipated by the HMRC Guidance, the new Direction –
- Requires employers to contribute to furlough pay from 1 August 2020 with the employer required to pay employer NICs and mandatory pension contributions for furloughed staff for August and additional contributions of 10% of salary costs in September and 20% of salary costs in October. The scheme will end on 31 October 2020.
- Confirms that the cut-off date for making claims under the original CJRS is 31 July for furlough periods up to 30 June.
- Requires that any claim for a furlough period on or after 1 July is made under the new scheme.
- Confirms that the new flexible CJRS can only be accessed by employers who furloughed staff and made a claim under the old CJRS and only in relation to staff who it previously furloughed. There are exceptions for employees returning from statutory parental leave and for armed forces reservists who can be furloughed for the first time on or after 1 July.
- Provides that from 1 July, employees can either continue to be fully furloughed or can do some work for the employer and be furloughed for the rest of their usual working hours.
- Requires there to be agreement between the employer and employee on the flexible furlough arrangements. The agreement must be made or confirmed in writing by the employer and must be retained until at least 30 June 2025.
- Confirms that, while there is no minimum furlough period from 1 July, the period an employer submits a claim for to HMRC must be a minimum period of 7 days.
- Specifies that the maximum number of employees that can be claimed for in a claim period cannot be higher than the “high-watermark number” of employees claimed for in claim under the old CJRS (up to 30 June). As an exception, TUPE transferees, returners from parental leave and military reservists can be added to this number.
- Contains detailed rules on how to calculate an employee’s usual hours and on determining the amounts claimable by the employer under the CJRS.
Employers should use the publication of the revised Treasury Direction as a further prompt to review their staffing requirements going forwards from 1 July and to consider how and when they might want to phase employees back to work using the flexibility which the furlough scheme now allows.