A new Treasury direction was issued by HMRC on 15 April 2021 to extend the CJRS from 1 May to 30 September 2021. Updated guidance on the operation of the CJRS from May 2021 was previously published on 8 April 2021 and the new direction reflects the changes made by the guidance. The rules of the CJRS are largely unchanged by the most recent Treasury direction, which contains the same purpose and written agreement requirements.
However, the following points are of note for the May to September 2021 period:
- HMRC will continue to publish names of employers claiming under the scheme.
- No claims may be made in respect of an employee on notice, or on sabbatical or unpaid leave (as previously).
- Employers can only claim for employees for whom a PAYE submission has been made to HMRC between 20 March 2020 and 2 March 2021 and for whom the employer has not notified HMRC of a cessation of employment. An employer can also claim for employees who transferred to them on or after 1 January 2021 if either TUPE or PAYE business succession rules apply, subject to certain conditions.
- The employer need not previously have submitted a claim in respect of the employee, or indeed any claim under the CJRS.
- When calculating the amount due to an employee, their relevant reference salary will be that paid in the same month in 2019 rather than 2020, to allow for the fact that the employee may have been furloughed in the same month of the previous year.
- The grant from HMRC will reduce from 80% of salary (capped at £2,500 a month) to 70% (capped at £2,187.50) on 1 July 2021, and 60% (capped at £1,875) on August 2021, with employers required to make up the difference to 80% (£2,500).
The updated guidance also notes that, in the event of a TUPE transfer, employers should ensure that information needed for future claims under the CJRS us passed on to the new employer including an employee’s relevant reference day and details of 80% of their wages.
For more information on any of the items raised in this article please contact a member of the Employment Law Team.