CJRS Guidance Changes 10 July 2020!

FFS – the flexible furlough scheme, though other initialisms are available!

The guidance had changed again, this time on 10 July 2020.

It is absolutely impossible to keep on top of it.  I’m sure even HMRC’s civil servants have no idea of the changes that have been made, let alone employers that are supposed to be complying with it.  Therefore, as I always say, please take a copy of the most recent guidance or, at least, the guidance that you are working to.  This is going to be essential to justify what you have done in the event of compliance at a later date.

The basic reason for the change in guidance is as a result of confusion / interpretation of section 2.2 in the 25 June 2020 Treasury Direction that gave us FFS.  This says:

The important words here are that 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)

OK, here we go:

Start at the ‘collection’ page on Gov.UK. There are 12 links to guidance here and I have indicated whether there has been a change – there have been 7 and 1 new piece of guidance:

There are two pieces of guidance under this section:

• Check if you can claim for your employees' wages through the Coronavirus Job Retention Scheme – first published 26 March 2020 and updated 18 times since then, sometimes twice on the same day according to the history section.  The last change was on 10 July 2020.  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.   The change was ‘Adjusted text to add clarity to 'Paying employee taxes and pension contributions' section and added wording to section on employee rights to make it clear that you can continue to claim for a furloughed employee who is serving a statutory notice period.’  This is very important to note – serving the notice period rather than making a payment in lieu for it...
• Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme – first published on 14 May 2020 and updated 8 times since then, excluding the ones where a Welsh translation has been added, the last update being 10 July 2020.  This change was exactly as per above.  The employer can claim where the employee is serving their notice period.  The guidance has removed the section about individuals that are not employees and moved them to a separate document

There are three pieces of guidance in this section:

• Steps to take before calculating your claim using the Coronavirus Job Retention Scheme – first published on 12 June 2020 and updated for the second time on 10 July 2020.  This is the one about what to include in wages and how to work out usual hours.  This update was ‘Wording has been added to make it clear 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 – like the above published on 12 June 2020 and updated for the third time on 10 July 2020.  This update was ‘to show 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. A link has also been added to a new full example for August, and the 'Working how much you can claim for employer National Insurance contributions has been updated to make it clear what steps to take if your employee's pay period goes beyond 30 June’.  I like this guidance as it makes clear that the reclaims calculation changes 01 July 2020 meaning what is paid may not be the amount that can be reclaimed
• Find examples to help you calculate your employees' wages – first published on 14 May 2020 and updated three times, excluding the ones where a Welsh translation has been added.  This did NOT change on 10 July 2020 and still points to ‘Examples of how to calculate your employees' wages, National Insurance contributions and pension contributions’ and ‘Examples of how to calculate your employees' wages, National Insurance contributions and pension contributions’

There are two pieces of guidance in this section:

• Claim for wages through the Coronavirus Job Retention Scheme – first published 20 April 2020 and updated 16 times (excluding the one update where it says a Welsh translation was added), the last being 10 July 2020.  This update is ‘Information added about the process HMRC is developing to recover overclaimed grant amounts through the tax system’.  Simply, legislation will be introduced for HMRC to recover unpaid overclaims – watch this space on that one
• Reporting employees' wages to HMRC when you've claimed through the Coronavirus Job Retention Scheme – first published on 23 April and updated 5 times, the last being 10 July 2020.  The change says ‘Adjusted the wording to make clearer that both employee and employer National Insurance contributions have to be paid to HMRC on the full amount’.  Essentially, the guidance says that the NICs calculated on the amount paid is the NICs that must be paid to HMRC

This was published on 26 June 2020 and was NOT updated 10 July 2020:

• Pay Coronavirus Job Retention Scheme grants back – the only update on 01 July 2020 is to say that a Welsh translation has been added

NOT updated 10 July 2020.

As I have said before, guidance was (and still is) all over the place before but seems to now be in one document called ‘Get help with the Coronavirus Job Retention Scheme’.  There is no publication date or update history, though it does say 22 April 2020

It is useful to have this information:

• Chancellor extends Self-Employment Support Scheme and confirms furlough next steps – news story from 29 May 2020
• Chancellor extends furlough scheme until October – news story from 12 May 2020
• Changes to the Coronavirus Job Retention Scheme – first published 12 June 2020, updated 01 July simply saying claims starting on or after 01 July 2020 could be made (as the calendar month of July had started)

There is the ‘step by step guide for employers’.  This did NOT change 10 July 2020.  As I have said before, I cannot see how we are on version 5:

1. This was first published on 17 April 2020
2. Welsh translation added 29 April
3. Revised on 11 May 2020 and
4. Updated 22 June 2020 ‘with more information about flexible furlough and overpayments English language version only - Welsh language version will follow shortly’.  The Welsh version is still 4

Plus there is the ‘Check if your employer can use the Coronavirus Job Retention Scheme’ guidance, first published on 26 March 2020 and updated 16 times since then.  This is designed for employees to find out if they are eligible and how much their employers can claim back.  The 10 July 2020 update has ‘Information added about employers being able to continue to claim for employees while they are serving a statutory notice period’. 

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. 

This is new and not part of the above collection for some reason. ‘Individuals you can claim for who are not employees’, first published 10 July 2020 includes information for employers about office-holders, company directors, directors with an annual pay period, salaried members of a Limited Liability Partnership (LLP), agency workers, limb workers, contingent workers in the public sector and IR35 / off-payroll workers.

This information has been lifted from the ‘Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme’ guidance to create a new document.  

FFS!  If this weren’t so serious and didn’t affect so many employees and their employers, it would actually be very funny.  However, it does affect them and the relentless changes in guidance is serious.

To HMRC:

‘Employers have made their furloughing decisions and made their reclaim decisions based on their interpretations of guidance that has been published over and over again.  Furloughing starts as a matter of employment law involving a change of contract.  That change of contract then manifests in what is paid. 

Employers cannot revisit mutually-agreed contractual changes every time guidance changes.  Please consider in your compliance regime.’