The Academies Financial Handbook is updated annually by the Department for Education and the Education and Skills Funding Agency; it contains a number of governance requirements for academy trusts.
Is it just me or are the updates and product launches of the Coronavirus Job Retention Scheme “CJRS” starting to resemble the seemingly continuous barrage of new and upgraded iPhones?
The difference, however, is that new phones usually come with additional instructions, even if they do get harder to understand if you are over 25! The now twice extended CJRS is without additional guidance; the drafter is playing catch up and will publish on 10 November. However, the Chancellor’s announcement of 5 November (found here) together with an HMRC policy document (found here) provide enough information about the extended furlough scheme to work out, taking the Apple analogy that little bit further, what elements are upgraded and what are just reconditioned from the last version.
An employer can claim under the extended scheme even if neither the employer nor the employee has made a previous claim under the CJRS (provided other eligibility criteria are met). The requirement that an employee needs to have been furloughed for three consecutive weeks prior to 30 June 2020 has been scrapped.
The employee must have been on the PAYE payroll on 30 October 2020 and the employer must have made a PAYE Real Time Information submission to the HMRC between 20 March and 30 October 2020.
The reduced Government support (60% for October) has been increased. The Government will now pay up to 80% of an employee’s wages when they are not working, subject to a cap of £2,500 pcm. The employer must pay any furloughed employees’ national insurance and pension contributions for the time not worked.
- Flexible furlough
Employers can put employees on both full-time furlough and flexible furlough arrangements and yet the Government’s contribution for time not worked will remain at 80%. This is due to be reviewed in January 2021, but the payments will not be tapered before 1 February 2021.
The Government has been slow to clarify this issue and there are still some discrepancies in the information we have available. What is clear from HMRC’s policy paper and the Government’s guidance on clinically extremely vulnerable people (found here) is that employees who are clinically extremely vulnerable will, subject to the other eligibility criteria, be covered by the extended scheme as they have been previously. There is no indication that new shielding letters will be sent out whilst England is in full lockdown, however, the guidance gives a full list of clinically extremely vulnerable groups by way of clarification. This will come as a relief to employees with underlying conditions who are unable to work from home. Similarly, a comfort to employers who faced difficult decisions and potential tribunal claims when insisting on previously shielding employees return to work.
What is not as clear is the situation regards employees who are carers of clinically extremely vulnerable people. The guidance on 4 November (found here) states that employees who live with people who are shielding must still go to work (whilst staying within the 5 November restrictions). However, the HMRC policy document published on 5 November and linked above, states that employees can be furloughed where they are unable to work because they:
are shielding in line with public health guidance (or need to stay at home with someone who is shielding) or have caring responsibilities resulting from coronavirus, including employees that need to look after children.
The distinction seems to be that employees who live with someone who is clinically extremely vulnerable can be furloughed provided they need to stay at home with the person which would suggest some sort of caring relationship. Whether that is different from an employee who does not care for the shielding person but needs to stay at home to protect them from infection is a matter of interpretation. Under the original furlough scheme, employees with “caring responsibilities” which had arisen because of Covid-19 were eligible. We would advise, in the absence of the Government guidance, that employees who are extremely clinically vulnerable can be furloughed as can employees who care for such people or who have child care responsibilities possibly arising from children either being ill or being sent home from school due to a confirmed case at a school/college or nursery. We do not think it extends out to employees who live with shielding people.
- Redundant employees
The Government have further extended the net of eligibility, as they did back in March, of the CJRS to employees who have been made redundant relatively recently. Under the extended scheme, employees who were employed and on the payroll on 23 September 2020 (the day the Job Support scheme was announced) and who were made redundant or “stopped working” afterwards can be re-employed and placed on furlough. Again, the employer must have made an RTI submission to HMRC between 20 March and 23 September 2020. Clearly, this will leave employers with a decision as to whether to bring employees back on the payroll who are unlikely to have a job come the end of the scheme, especially as they will have to start paying NIC and pension contributions for them. We do not know at this stage about redundancies whilst on furlough and whether the new terms will be the same as before.
- Payment calculation
When calculating pay for any period of furlough, the Government has differentiated the method of calculation according to whether the employee would have been eligible for the first furlough scheme. Employees who were eligible, even if they were not furloughed will have their furloughed wages calculated according to the existing scheme. However, employees who were not eligible will be subject to different reference periods and more details will follow in the updated guidance. This sounds like a complicated arrangement for employers and their payroll staff so we will hopefully have more clarity with the guidance.
Instruction book required
One thing we have learned throughout this pandemic is that new guidance can change the sense of a provision with the inclusion of just one or two words and treasury directions can cause further chaos leaving us all floundering. We await the Government guidance if not with bated breath then certainly with some trepidation. We hope for clarity on carers and shielding and more information about employees transferred under TUPE, holiday accrual, redundancies and dismissals whilst on furlough, etc.
For more information
Please contact Matt Wort if you require any further information.
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