Coronavirus Job Retention Scheme: Updated Guidance

The updated guidance confirms that foreign nationals are eligible to be furloughed. Grants under the scheme are not counted as ‘access to public funds’, and you can furlough employees on all categories of visa.

In addition to banning work on behalf of the employer, the updated guidance makes it clear that this also covers “any linked or associated organisation.”

SSP is payable in these cases unless the employer has made a business decision to furlough roles in which case they can also furlough people on sick leave or in self-isolation. However, an employee can’t be on sick leave and on furlough at the same time so the individuals would only receive SSP, and the employer can only claim SSP rebate, during the period which is treated as sickness absence and from the point the employee is furloughed, no SSP should be paid (and no rebate claimed).

This is a change to the rules as the previous guidance stated that an employee could only move on to furlough at the end of their period of sickness absence. Now, the guidance makes it clear that the employer can decide to end the period of sickness absence and start a period of furlough. Equally, if the employee becomes ill when furloughed, it is up to the employer as to whether they keep them on furlough or move them on to SSP.

The guidance makes it clear that “short term illness/self-isolation should not be a consideration in deciding whether to furlough an employee”. Employers should therefore not base the decision to furlough simply because the employee is sick or self-isolating (this would probably bring them under the 3-week minimum period anyway).

The previous version of the guidance stated that shielding employees could be furloughed “if they are unable to work from home and you would otherwise have to make them redundant.” In a significant shift, the latest version has dropped all mention of redundancy and simply says “Employers are also entitled to furlough employees who are being shielded or off on long-term sick leave. It is up to employers to decide whether to furlough these employees.” This seems to give a very wide discretion to employers as to whether they want to furlough, but as with all exercises of discretion, it's important that these decisions should be made consistently and fairly.

Putting all shielding employees on furlough seems fair, especially given the fact that the latest revision to the SSP regulations seems to exclude shielding as a period of incapacity for SSP purposes. This exclusion is surprising, and the furlough guidance assumes SSP would be payable (so there is not exactly an aligned approach here). It may be that there will be a third change to the SSP regulations but in the meantime, employers should be made aware that if they decide to put shielding employees on furlough, they need to be careful not to pay SSP and furlough pay ( or claim SSP rebate and furlough grant) for the same period of time.

The updated guidance confirms that employees transferred after 28 February will be covered by the scheme.

The scheme will also apply where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 28 February 2020.

The guidance answers a question which has popped up a few times, how do you calculate the claim value where the employee was on statutory leave as of 28 February? Their claims should be calculated against their salary, before tax and not the pay they received whilst on statutory leave.

Claims for those on variable pay, returning from statutory leave should be calculated using either the:

• same month’s earning from the previous year
• average monthly earnings for the 2019-2020 tax year

The government has added 4 additional pieces of information which will be required when lodging a claim:

• National Insurance Numbers for the employees you want to furlough
• Names of the employees you want to furlough
• Payroll/works number for the employees you want to furlough
• Your Self- Assessment Unique OR Your Corporation Tax Unique Taxpayer Reference OR Your Company Registration Number

If the employer uses a business which is authorised to act on its behalf for PAYE purposes, they will be able to make a claim for them. However, if they use a file only agent (who files RTI returns but doesn’t act on any other matters) they won’t be authorised to make a claim and the employer will need to do this.