HMRC have issued a further update to their Guidance on the Coronavirus  Job Retention Scheme (JRS).   Despite the updated guidance being issued the evening before the Good Friday bank holiday,  it still does not address the issue of holiday entitlement during furlough or pay for any such holiday.  We anticipate further guidance on this topic next week.

Points covered in today’s updated guidance include –

• If, for business reasons, an employer wants to furlough an individual who is currently on sick leave, they may do so.  The individual should no longer receive statutory sick pay (SSP) and should be classified as a furloughed employee, receiving furlough pay under the JRS.  This can include employees who are on long-term sick leave, but an employer cannot claim under the SSP rebate scheme and the JRS at the same time.  So if a long term absentee is put on furlough,  SSP would end and a claim would have to be made through the JRS instead.
• If an employee becomes sick while furloughed, they must be paid at least SSP. It is up to the employer to decide whether to move the employee onto SSP or to keep them on furlough at their furloughed rate which can be claimed through the JRS.   If the employee is moved onto SSP, the employer can no longer claim for the furloughed salary through the JRS. Employers are required to pay SSP themselves, although may qualify for a rebate for up to 2 weeks of SSP.
• Clarification that shielding workers do not have to be at risk of redundancy in order to be eligible for furlough – this requirement was widely considered to be an error in the previous version of the guidance.
• Clarification that furloughed workers cannot work for their employer or for any associated or ‘linked’ organisation.
• Clarification in relation to TUPE: A new employer is eligible to claim under the JRS in respect of the employees of a previous business transferred after 28th February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.
• Where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 28 February 2020, the new scheme will be eligible to furlough those employees and claim the grants available under the JRS.
• A change in relation to employees returning from family friendly leave whose pay would otherwise been adversely impacted. In line with other employees, claims for full or part-time employees returning from statutory leave after 28 February 2020 should be calculated against their salary, before tax, not the pay they received whilst on statutory leave. Claims for those on variable pay, returning from statutory leave should be calculated using either the same month’s earning from the previous year or average monthly earnings for the 2019-2020 tax year. This may still disadvantage maternity etc returners but to a much lesser extent.
• To claim through the JRS, employers will need:
  • employer PAYE reference number
  • the number of employees being furloughed
  • National Insurance Numbers for the employees you want to furlough
  • Names of the employees you want to furlough
  • Payroll/works number for the employees you want to furlough
  • Self-Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number
  • the claim period (start and end date)
  • amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
  • bank account number and sort code
  • contact name
  • phone number.
• Grants under the scheme are not counted as ‘access to public funds’, which means employers can furlough employees on all categories of visa.
• The grant from the JRS must be paid to an employee in the form of money and cannot be used to pay for the provision of benefits or a salary sacrifice scheme.    Also, employers cannot enter into a transaction with employees which reduces their wages below the amount of the grant received in respect of them, including by imposing an administration charge or fee.
• In relation to pensions,  as well as the updated HMRC Guidance, the Pensions Regulator has also today published guidance for employers about automatic enrolment and pension contributions.  The Regulator’s guidance confirms that employers’ automatic enrolment duties continue to apply as normal whether their staff are still working or are being furloughed.  It also provides information for employers who are struggling to make pension contributions including information about the JRS.  The HMRC guidance clarifies that employer’s may claim employer pension contributions on furlough pay up to the level of the minimum automatic enrolment employer contribution (i.e. 3% of qualifying earnings).   In relation to the JRS the Regulator’s guidance states that if employers are paying more than the automatic enrolment statutory minimum contributions, the excess will not be funded by the JRS. The employer will continue to have an obligation to make the correct contributions due under the scheme and,  in this case,  will have to pay a proportion of the pension contribution cost itself.  However, the guidance also notes that employers using defined contribution schemes may be able to decrease contributions to the statutory minimum, noting a number of factors that will need to be considered in relation to this including employment contracts, the scheme rules and governing documents and consultation requirements under pensions legislation.