Late on Friday evening, HMRC published the Treasury Direction (hereafter referred to as the ‘Direction’) which provides the legal framework that underpins and takes precedence over the Furlough Guides. On initial review the Direction appears consistent with the versions of the updated Guides.

We have set out below a short summary of the Direction.

Following the publication of the extended Furlough Scheme Guides on Tuesday 10 November 2020, HMRC published  two updates last week, the second being published on the now familiar ‘Furlough Friday”.

The two updates are: Check which employees you can put on furlough and Claim for wage costs through the CJRS

In addition, the Employee Guidance was also updated Employee Furlough Guidance

We have set out below important changes that you should be aware of.

TREASURY DIRECTION

The Direction stipulates that HMRC are responsible for the payment and management of amounts to be paid under the Scheme.

The schedule to this Direction sets out the Scheme applying for the period beginning on 1 November 2020, and ending on 31 January 2021. The Scheme applying after 31 January 2021 will be set out in a further Direction made by the Treasury in exercise of the powers conferred by sections 71 and 76 of the Coronavirus Act 2020.

A further schedule in the Direction withdraws the Coronavirus Job Retention Scheme (Job Retention) Bonus. This was the bonus that was due to be paid to employers who had previously furloughed and retained employees in employment until 31 January 2021. Given the extension to the furlough scheme the purpose of the bonus has been superseded.

GUIDE UPDATES

Notice Periods

The updated guide on ‘check which employees you can put on furlough’ clarifies an important change in relation to notice periods. This comes as no surprise given the wording in the initial guide published at the start of last week.

The position in respect of notice pays for claim periods starting on or after 1 December 2020 will change. Businesses will no longer be able to claim for any days on or after 1 December 2020, during which the furloughed employee is serving a contractual or statutory notice period for the employer. This will also include people serving notice of retirement or resignation. The update states that “If an employee subsequently starts a contractual or statutory notice period on a day covered by a previously submitted claim, you will need to make an adjustment.”

Whilst the Employer’s guide confirms that the furlough grant can be used to pay statutory notice periods up to and including to 30 November, the guide is silent on contractual notice. However, the updated Employee guide suggests that the grant can be used to pay both contractual and statutory notice periods up to and including to 30 November. Urgent clarification is being sought on this point from HMRC. Our view is that the Employee Guide is correct and the grant can be used for both contractual and statutory notice periods up and including to 30 November 2020.

A point that you should note is that if you have re-employed persons or intend to for the purposes of availing of the Furlough Scheme until end of January 2021, arguable this is an agreed extended notice period, which would preclude you from claiming the grant for those persons. It does seem to be contrary to the purpose behind re-employing individuals and we are hopeful that clarification will also be provided on this point. If you have re-employed any person then we recommend you contact the Legal Team for further advise.

Maternity

The paragraph in the Guide on ending maternity leave for the purposes of being furloughed has also changed. It now states that the businesses can agree to shorten the 8 week notice period in ‘certain circumstances’. Unfortunately there is no explanation provided on what amounts to ‘certain circumstances.’  It clarifies that businesses will not be able to furlough employees until the end of the 8 weeks, or the date that you have agreed they can return to work.

Information that HMRC will make public

Further information has been provided on what will be published by HMRC for those who have made claims under the Scheme on or after 1 December. It will include the employer names and an indication of the value of the claim.

HMRC will provide further information on how they will value the claim in late November.

HMRC will not published details if a business can show that publication would result in a serious risk of violence or intimidation to certain individuals, or any individual living with them. Those individuals include: employees, directors, trustees, officers, etc

Businesses seeking to have their details excluded from publication for this reason will be required to provide an explanation to HMRC, and provide evidence. Such evidence could include: police incident number; photographs or evidence of an attack / threat etc.

Further details on how to request HMRC not to publish your details will be available before the first publication date.

Claim deadlines

Information relating to claim period deadlines and timings have been clarified. All claims up to 30 November must be submitted by 14 December 2020.