CJRS – Updated guidance and new Treasury Direction

Updates to the Coronavirus Job Retention Scheme (“CJRS”) guidance and a corresponding Treasury Direction were published on 13 November 2020. The Treasury Direction, which formally extends the CJRS from 1 November 2020 until 31 March 2021, outlines how it will operate between 1 November 2020 and 31 January 2021.

This is the fourth such Treasury Direction to be issued. Together, the Treasury Directions form the legal framework for the Coronavirus Job Retention Scheme (CJRS).

The fourth Treasury Direction:

• formally extends the CJRS from 1 November 2020 until 31 March 2021;
• sets out the detail of how the CJRS will operate between 1 November 2020 and 31 January 2021 (fifth Treasury Direction covering February and March 2021 to be published in due course); and
• withdraws the Coronavirus Job Retention Bonus.

The main focus of the 32-page document is to address how the CJRS will operate until 31 January 2021. The rules cover a wide range of issues including:

• eligibility;
• furlough agreements;
• claim periods;
• reference salaries;
• calculating the usual hours of work;
• permitted activities during furlough; business succession (including TUPE);
• PAYE scheme reorganisations; time limits for making claims;
• and publication of CJRS claimants’ details.

In the meantime, here are some key points worth noting:

• Claims may not be made for any day that an employee is serving notice between 1 December 2020 and 31 January 2021 (and the latest guidance says this means both statutory and contractual notice periods).
• HMRC will publish employer names, an indication of the value of the claim and, for companies and Limited Liability Partnerships (LLPs), the company registration number of those who have made claims under the CJRS for the month of December onwards. An exception may be made for employers who can show that publication would expose their workforce to “serious risk of violence or intimidation”.
• Employers can claim under the CJRS before, during, or after they process their payroll as long as the claim is submitted by the relevant claim deadline. No claim can be submitted more than 14 days before the employer’s claim period end date.
• Furlough agreements must be in place before the start of the relevant claim period (but may be varied during the claim period). It should be sufficient to update an earlier furlough agreement, provided it is done before the employee is furloughed under this phase of the CJRS. There was a small window of opportunity for employers to backdate agreements (13th November 2020), but this has now passed.
• Employees on the payroll as at 30 October will now be eligible. In addition employees made redundant since 23 September can be re-employed and furloughed. The rules for calculating the normal hours and pay of this additional cohort of employees will be adjusted accordingly, but the old rules will continue to apply to employees who were eligible under the original Scheme.
• Where an employee ends their maternity leave early to enable them to be furloughed (with the employer’s agreement), they will need to give at least 8 weeks’ notice of their return to work, although shorter notice can be agreed in “certain circumstances”. The employer will not be able to furlough the employee until the end of the 8-week period, or until the date that the employer has agreed they can return to work.
• The Coronavirus Job Retention Bonus has been withdrawn given that the purpose of it has been superseded by the extension of the CJRS.

We are expecting further guidance to be published in late November 2020 and a fifth Treasury Direction (applying after 31 January 2021) to be published in due course.

UPDATE 19.11.20 – The information has been updated to include more detail about what HMRC may deem to be a reasonable excuse for missing a claim deadline. The information has also been amended to make clear that if a claim deadline falls on the weekend or a bank holiday then claims should be submitted on the next working day.  Read further details here.