12 June 2020 and let’s try again to get our heads around the latest changes to HMRC’s guidance on the Coronavirus Job Retention Scheme (CJRS).  This was published around 11pm on 12 June 2020.

It is becoming more and more important all of the time to keep on top of this because of:

Flexible Furloughing

On 29 May 2020, the Chancellor announced ‘flexible furloughing’ from 01 July 2020.

Very simply, the 21-day fixed furlough period for reclaim entitlement under the Coronavirus Job Retention Scheme (CJRS phase 1) is going.  Phase 2 allows the employer to bring the furloughed employee back for any number of days and hours if that suits the needs of the business.  Reclaims can be made under the CJRS for the hours that an employee has been flexibly furloughed.

‘Changes to the Coronavirus Job Retention Scheme’ Policy Paper

On 12 June 2020, HMRC published the above paper explaining how the CJRS closes on 31 October 2020 and the changes in place from 01 July 2020, i.e. flexible furlough.

HMRC’s Penalty Regime

Shortly after the Chancellor had made the announcement about the CJRS changes a consultation was issued by HMRC on empowering then to audit all COVID-19 business support schemes.  This includes the CJRS.  The consultation closed on 12 June 2020, very shortly after the new guidance was published.

There are three documents forming the consultation which will insert audit powers for HMRC into the Finance Bill 2020:

  1. The draft clause
  2. The draft explanatory note
  3. The draft Tax Information and Impact Note (TIIN)

Essentially, and importantly, the legislation will provide for an audit officer of HMRC to make an assessment of whether they consider that an employer has received any Coronavirus support payment to which they are not entitled.  This is to do with protecting the taxpayer from possible fraudulent claims.  The audit process will allow HMRC to check that claims have not been overstated and that the scheme (CJRS) has only been used to pay wages and reimburse National Insurance and pension amounts.

There are significant penalties, such as the imposition of a 100% charge on the receipt of payments to which the employer is not entitled and which have not been used to pay wages and / or reimburse National Insurance and pension costs.  This is if HMRC can demonstrate that the employer has behaved deliberately.

The proposed legislation says that the correct operation of the CJRS will be as per the revised Treasury Direction issued on 20 May 2020.

Therefore, it seems as though, regardless of when the employer’s intentions and the decisions were made, they will be penalised as per the latest guidance.  Therefore, there was an announcement on which employers took action, only to find out at a later date that they may be penalised based on subsequent legislation and guidance.

Employers need to be aware of this future compliance activity that gives HMRC large audit powers.  Employers may also want to revisit their furloughing decisions and values being claimed.

The 8 Pieces of Guidance

To be honest, it is impossible to keep on top of all of the guidance. There were 7 pieces and now there are 8 must-see places.

Not forgetting:

Another New ‘Direction’?!

Don’t forget that on 20 May 2020, HM Treasury published a revised ‘Direction’.  This is displayed on Gov.UK as ‘Further Treasury Direction made under Sections 71 and 76 of the Coronavirus Act 2020’.

However, we will need another Direction, so keep an eye out on this page.

Check if your employer can use the Coronavirus Job Retention Scheme

This guidance was first issued on 26 March 2020 and last updated on 05 June 2020 as follows:

  • Information in the box at the top of the page updated with how the scheme is changing
  • Contact HMRC information updated with the line ‘HMRC can only give you general advice and is unable to help you with a specific claim’

It was not updated on 12 June 2020.

Check if you can claim for your employee’s wages through the Coronavirus Job Retention Scheme

This guidance was first issued on 26 March 2020 and last updated on 12 June 2020 with information about how the scheme is changing if employers decide that they will be using flexible furlough.

Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme

This guidance was first issued on 14 May 2020, last updated on 12 June 2020 with information about how the scheme is changing if employers decide that they will be using flexible furlough.

Work out 80% of your employees’ wages to claim through the Coronavirus Job Retention Scheme

This guidance was first issued on 17 April 2020, last updated on 05 June 2020.  It was not updated on 12 June 2020 and I wondered if it is necessary given that so much of the contents are repeated in other guidance.

Indeed, it has been removed.

Calculate how much you can claim using the Coronavirus Job Retention Scheme

This was first published on 12 June 2020 and seems to be a rehash of the above ‘80%’ guidance plus some new information about how the scheme is changing if employers decide that they will be using flexible furlough.

Examples of how to calculate your employees’ wages, National Insurance contributions and pension contributions

This was also first published on 12 June 2020 and contains a very simple calculation example that will only apply to some employers if employers decide that they will be using flexible furlough.

Steps to take before calculating your claim using the Coronavirus Job Retention Scheme

This was also first published on 12 June 2020 and is a massive piece of guidance if employers decide that they will be using flexible furlough.

Claim for wages through the Coronavirus Job Retention Scheme

This guidance was first published on 20 April 2020, last updated 12 June 2020 with information about claiming where an employee has been flexibly furloughed.

Reporting employees’ wages to HMRC when you’ve claimed through the Coronavirus Job Retention Scheme

This guidance was first published on 23 April 2020, last updated 12 June 2020 with information about how the scheme is changing.  They are not significant changes.

Summary

Please do keep an eye out for the Treasury Direction to be amended.

 

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