Jarred Consulting

We have published two previous Q&As on the Coronavirus Job Retention Scheme (“Furlough Scheme”) and this third note is intended to give a further update in response to clarifications issued by the government. The publication of legislation and guidance at such pace inevitably meant not every question about the scheme has been answered and that still remains the case and we will keep the furlough scheme on our radar and update you accordingly. Please note that this note is intended to be supplementary to that published by us on 22nd April 2020. HMRC portal The claims portal for employers to submit claims went live on 20 April. By the end of the first day, 185,000 employers had made claims; 1,300,000 employees had been confirmed as furloughed and claims totalled £1.5bn. The portal can be accessed at: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retentionscheme Employee Relations ▪ A collective agreement reached between an employer and a trade union is acceptable evidence that a furloughed employee has agreed to be furloughed. ▪ Employees may take part in individual or collective representation of employees or other workers whilst they are furloughed, for example, redundancy consultation. ▪ Those on fixed-term contracts can be furloughed. If the fixed term contract has not already expired, it can be extended or renewed and the worker can be furloughed – so long as an RTI payment was notified to HMRC on or before 19 March. Making a Claim ▪ There is clarity on the process for making a claim. It is up to the employer to decide on the length of each claim period, based on their payroll frequency. Employers will need to make sure they include all of the employees they want to furlough for each claim period as they are unable to make another claim for the same period or one that overlaps with it. ▪ It is not possible to amend a claim once submitted although HMRC are looking at this. We have no current insights into a possible date for a decision on this therefore diligence is recommended. ▪ It is clear that the government will check claims made through the scheme and those based on inaccurate or dishonest information, or found to be fraudulent will need to be repaid in full to HMRC. An online portal will be made available for employees and the public to report suspected fraud to HMRC. Unanswered Questions Include ▪ A question over notice pay if the employee is on furlough leave for some, or all, their notice period. As they have agreed to be furloughed do furlough wages apply, or should it be at 100% of wages? ▪ Aside from collective agreements with trade unions (see above) there remains uncertainty about what evidence is required to show employees’ agreement to being furloughed. Our views remains that in the circumstances an auditable agreement between employer and employee is best. ▪ What is meant by wages that are “conditional” (which cannot be claimed in any event). Written by our associate Euan Graham There are still areas of uncertainty relating to furlough leave, for example, can an employee be on furlough leave and holiday at the same time? We will keep this document under review and update it as appropriate. Please keep an eye on our website: www.jarredconsulting.com for further updates.