UPDATE: Following announcements on Friday 29 May 2020, we produced an updated article.
We are still expecting some clarification on various points concerning Furlough leave. Here are some key points to note:
- Annual Leave – An employee can take annual leave while on furlough. However, the employer will have to “top up” to 100% of normal pay, as expected. There is still no clarification on whether the Employer can “force” an employee to take annual leave whilst on furlough. However, on the basis that they can take annual leave whilst on furlough, this is likely to be possible.
- The furlough scheme has been extended from 31 May 2020 to the end of June 2020.
- An employer needs to write to their employees to inform them that they have been furloughed. They must do so before the employee has been furloughed. The Employer needs to keep a copy of the written notification for five years. HMRC will only recognise furlough as valid if “the employer and employee have agreed in writing that the employee will cease all work in relation to their employment.” So, employers need to ensure that an actual agreement, which states that the employee will cease all work is provided to the employee.
- The HMRC portal is live today, 20 April 2020!
- Employees who were employed on 19 March 2020 are eligible for furlough (extended from 28 February 2020), as long as the employer has submitted real-time information (RTI) payroll data by that date.
- The CJRS applies to anyone who is furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease.”
- A Director can be furloughed but can only carry out work to fulfil a duty or other obligation from an Act of Parliament relating to the filing of company’s accounts or provision of other information relating to the administration of the director’s company.
- Tips, performance-related bonus or discretionary payments are not deemed to be “regular salary or wages”.
For more information on the CJRS “furlough” scheme or if you require assistance, please contact us.
