HMRC have now published guidance for employers on how the Coronavirus (COVID-19) Job Retention Scheme (furlough leave) will operate.
Collingwood Legal have highlighted some points in the guidance which are new:
- Employers must notify any employee being placed on furlough leave in writing in order for the employee to be eligible for the Scheme. A record of this communication must be kept for five years.
- If an employee has stopped working for an employer on or after 28 February 2020, that employer can re-employ them, place them on furlough leave and claim for their wages through the scheme even if they left their employment voluntarily. This was not previously understood to be possible, as the previous guidance stated this would only be possible where the affected employee had been made redundant. However, it is important to note that employers are not under a legal obligation to re-instate ex-employees in order to place them on furlough leave and that this may only happen where the employer agrees to do this.
- Previously fees, bonuses and commission were to be excluded from any claim under the Scheme. However, now employers may claim for any regular payments they are obliged to pay their employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded. There is also further guidance on benefits in kind, including salary sacrifice schemes.
- Employees are permitted to work for another employer whilst they have been placed on furlough (if contractually allowed), and this will not affect their entitlement to the Scheme.
- The guidance also clarifies specific areas with different PAYE employees, including company directors, LLP members and apprentices.
We recommend that you read the guidance in full and get in contact with us if you have any further questions. Click the link here to access the guidance.