A further Treasury Direction has been made under sections 71 and 76 of the Coronavirus Act 2020 in order to extend and modify the Coronavirus Job Retention Scheme (CJRS). The Direction sets out how the scheme will apply from 1st November 2020 to 31st January 2021 as well as extending the scheme until 31 March 2021. A further direction will be made by the treasury in respect of the period between 31st January 2021 and 31 March 2021 at a later date.

Provisions extending the scheme

The scheme is largely the same as that which you will all now be familiar with and the direction accords with the guidance published by the government last week. We have set out the key elements of the direction below.

An employer will be eligible if they have a qualifying PAYE scheme (registered on HMRC’s Real Time Information System for PAYE on or before 30th October 2020). If an employer has more than one PAYE scheme then separate claims must be made for each scheme.

An employee can be furloughed if a payment was made to the employee through a PAYE scheme and reported to HMRC before the 31st October 2020, there is an agreement in place and the employee has been instructed to do no work/not to work their usual hours as a result of Coronavirus.

For the period between 1st November 2020 and 13th November 2020 an agreement for furlough was classed as covering this whole period retrospectively. Going forward, you cannot retrospectively furlough an employee.

A CJRS claim period should be a minimum of a 7 day consecutive period which begins and ends within the same CJRS extension calendar month. The exception to this is in the limited circumstance where a period of not more than 6 days either begins on the first day of a CJRS extension calendar month or ends on the last day of a CJRS extension calendar month (an orphan period). You can only claim for an employee in respect of an orphan period where you have already claimed for the same employee in the period ending immediately before it.

The direction also sets out the formula and criteria for calculating what you are entitled to claim for an employee. Guidance about the calculation for furlough payments is complex and we would recommend taking advice if you are unsure as to the calculations.

A claim for furlough must not include amounts for the following specified statutory payments:

• Maternity Pay;
• Adoption Pay;
• Paternity Pay;
• Shared Parental Pay; and
• Parental Bereavement Pay.

The direction also clarifies a point which was under consultation when the extended scheme guidance was unveiled. As of the 1st December 2020 until 31st January 2021, you will not be able to claim for an employee who is serving either a statutory or contractual notice period. You will also not be able to claim for an employee who is on a sabbatical or other unpaid period of leave for the period between 1st November 2020 and 31st January 2021.

Training and study will still not be classed as time spent working where this does not directly provide a service, contribute to the business’ activities or provide income or profit to the employer.

Employees who are undertaking their duties as a trustee of a pension scheme, or fulfilling an obligation arising from an Act of Parliament relating to the filing of company accounts, making a CJRS claim, or the payment of wages should not be classed as working for the purposes of the CJRS.

You are still able to claim for employees who have been TUPE transferred to you, if the TUPE or PAYE business succession rules apply to the change in ownership, the transfer occurred on or after 1st September 2020, they were employed by either their old or new employer on 30th October 2020 and they were on a PAYE Real Time Information submission for either their old or new employer between 20th March 2020 and 30th October 2020.

Where you have reorganised your PAYE schemes you can still make a claim in respect of an employee who is a former member of one of your transferred PAYE schemes and is a qualifying member under the CJRS scheme by virtue of a payment reported via a PAYE Real Time Information submission.

All CJRS claims must be made on or before the CJRS deadline day of the relevant calendar month, which are as follows:

• 14th December 2020 in relation to claims for November 2020;
• 14th January 2021 in relation to claims for December 2020; and
• 15 February 2021 in relation to claims for January 2021

HMRC will be publishing information about employers who have received a payment in respect of the December 2020 or January 2021 claim months. The information which will be published is; the name of the employer/the PAYE scheme, a company reference number where available and the amount (or a reasonable indication of the amount) claimed by the employer.

Coronavirus Job Retention Scheme Job Retention Bonus

Part two of the direction withdraws the Job Retention Bonus on the basis that the extension of the CJRS scheme has superseded the requirement for the bonus at this time.

If you need advice or have any queries about dealing with any workplace issues arising from the COVID-19 outbreak, please contact Paul Chamberlain or another member of the employment team at JMW Solicitors LLP on 0345 241 5305.

This note is for general guidance only and should not be used for any other purpose. It does not constitute, and should not be relied upon as legal advice.

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