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Yesterday evening HMRC issued a further update to their employer and employee guidance on the Coronavirus Job Retention Scheme (CJRS).
The key points of note are set out below:
- In relation to TUPE transfers, the guidance now confirms that the new employer is eligible to claim under the CJRS in respect of employees transferred to it after 28 February 2020, if either the TUPE or PAYE business succession rules apply to the change in ownership.
- Similarly, 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 under the CJRS.
- Employees who are currently on sick leave can be furloughed. The furloughed sick employee should no longer receive statutory sick pay (SSP) and should instead receive furlough pay under the CJRS.
- If an employee becomes sick while furloughed, the employer can decide whether to move the employee onto SSP (which cannot be claimed through the CJRS) or – more likely - to keep them on furlough at their furloughed rate (which can be claimed through the CJRS). Employers are required to pay SSP themselves, although small employers may qualify for a rebate for up to two weeks of SSP per employee.
- Employees who are shielding (or looking after someone who is shielding) can be furloughed; the suggestion in the previous version of the guidance that such employees must be unable to work from home and otherwise at risk of redundancy has been deleted.
- The employer guidance now mirrors the employee guidance in confirming that furloughed workers cannot work for their employer or for any associated or ‘linked’ organisation (our emphasis).
- The guidance now expressly states that all the grant received to cover an employee’s subsidised furlough pay must be paid to them in the form of money. No part of the grant should be netted off to pay for the provision of benefits or a salary sacrifice scheme.
- There is also a change in relation to what can be claimed for employees being furloughed after a period of family leave. Claims for full or part-time salaried employees should be calculated against their normal salary, not the pay they received whilst on family leave. Claims for those on variable pay returning from family leave should be calculated using either the same month’s earning from the previous year, or their average monthly earnings for the 2019-2020 tax year.
- Finally, the guidance now confirms that grants under the CJRS are not counted as ‘access to public funds’, which means employers can furlough employees on all categories of visa.
There are still some areas of uncertainty not addressed in the updated guidance, including taking holidays during furlough and pay for any such holiday. We therefore anticipate further updates to the guidance next week, and will provide further updates as and when they are published.