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Furlough Leave – 15th April 2020

Coronavirus Job Retention Scheme (furlough leave)

HMRC have published further guidance for employers on how the Coronavirus (COVID-19) Job Retention Scheme (furlough leave) will operate. Additionally, the Treasury has issued a Direction to HMRC under the Coronavirus Act 2020, which is likely to be the definitive guidance on how the CJRS works. We also now know that the HMRC online portal will be available from the 20th April 2020.

We have summarised the main changes from this guidance below:

  • Employees who have been on their employer’s payroll since 19th March 2020 will now be eligible for furlough leave. The previous qualifying date was 28th February 2020, but has now changed. This change will mean that many employees who were previously ineligible and out of scope of the Scheme can now be placed on furlough leave. However, this is provided the employer had submitted real time information payroll data by 19th March.
  • The Scheme is not limited to those employees who would otherwise be made redundant.  It is applies to any employees who are furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease”
  • To claim under the Scheme, there must be a written agreement in place which states that the employee will cease all work. Previous guidance only required notification, rather than written agreement. This may therefore mean that some employees who have been notified that they have been furloughed without agreeing to it in writing may be ineligible for the Scheme.
  • Employers may place employees who are absent on sick leave on furlough leave and vice versa. However, this should not be used to top up small amounts of SSP for short term absences. It has also been confirmed that employers can furlough ‘shielding’ employees, and they do not have to be placed on sick leave.
  • The application of TUPE has been clarified – A new employer is eligible to claim under the Scheme in respect of the employees of a previous business transferred after 19 March 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.

We recommend that you read both sets of  guidance in full and get in contact with us if you have any further questions.

Click the link here to access the Government guidance.

Click here to read the Treasury’s Direction to HMRC.

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