20.07.2020

Update: Guidance Changes to CJRS

Guidance for the Coronavirus Job Retention Scheme (CJRS) was updated again on July 10th 2020. There is now more clarity around whether employers can claim for an employee who is serving their notice period. It also includes various other updated information which is important for employers to know.

The Coronavirus Job Retention Scheme (CJRS) grants can only be claimed by employers for monies paid that ‘continue the employment’ of a retained employee.  Therefore, any payment that is made that is not a continuation of employment is excluded from the CJRS.  For example:

  • Payments made to a leaving employee in lieu of notice (which is quite different from an employee who is serving their notice)
  • Payments made to a leaving employee for outstanding holiday pay (which is quite different from an employee who is taking holiday and receiving payment)

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For employers, a good place to start for all of the Coronavirus Job Retention Scheme (CJRS) guidance is the ‘collection’ page on Gov.UK. On July 10th updates were made to the below sections:

Check if you can use the scheme

There are two pieces of guidance under this section:

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

This is critical guidance and explains that what is paid is as per the mutually-agreed employment contract.  This may be different from what can be reclaimed.

  • Update clarifies that employers can continue to claim for a furloughed employee who is serving a statutory notice period.
Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme:

This change was exactly as per above. The employer can claim where the employee is serving their notice period.

Work out what you can claim

There are three pieces of guidance in this section:

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

This details what to include in wages and how to work out usual hours.

  • Update clarifies that HMRC will not decline or seek repayment of any grant based solely on the particular choice between fixed or variable approach to calculating usual hours, as long as a reasonable choice is made.
  • With regards to holiday pay being reclaimable or not, see the 01 July 2020 update that says that employers can be recorded as being on furlough (and, therefore, claimed) ‘during time spent on holiday’ – i.e. not paying out holiday  

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

The changes to this section make it clear that the reclaims calculation changes on 1st July 2020 meaning that what is paid may not be the amount that can be reclaimed.

  • Updates shows that the calculator can now be used to work out what you can claim for in a claim period ending on or before 31 August.
  • Clarifies how much you can claim for employer National Insurance contributions if your employee’s pay period goes beyond June 30th.
Claim and report earnings

There are two pieces of guidance in this section:

Claim for wages through the Coronavirus Job Retention Scheme:
  • Updated guidance includes information about the process HMRC is developing to recover overclaimed grant amounts through the tax system. Simply put, legislation will be introduced for HMRC to recover unpaid overclaims.
Reporting employees’ wages to HMRC when you’ve claimed through the Coronavirus Job Retention Scheme:
  • Clarifies that the NICs calculated on the amount paid is the NICs that must be paid to HMRC.
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