Furlough does it include overtime?

hb2

maxico said:

Hi Jeremy, what do you mean by paying too little is a higher risk?

If employers pay too much, they will fund only the extra out of their own pockets. If they pay too little HMRC could make them pay back all of that money, so they will have paid it all out of their own pockets  . . .

Jeremy535897

From my earlier post:
The CJRS claim made in respect of your pay is only valid if you are paid at least 80% of your "reference salary", and the debate is whether that includes overtime or not. If the claim is based on no overtime, and overtime should be included, the CJRS claim may be invalid for that reason, unless your employer can argue their calculation was "reasonable". Based on the fact that you are getting completely different answers from HMRC about the issue, I suspect they would be able to argue what they are claiming is reasonable.

See Treasury Direction:
"7.1 Costs of employment meet the conditions in this paragraph if-
(a) they relate to the payment of earnings to an employee during a period in which the employee is furloughed, and
(b) the employee is being paid-
 (i) £2500 or more per month (or, if the employee is paid daily or on some other periodic basis, the appropriate pro-rata), or
 (ii) where the employee is being paid less than the amounts set out in paragraph 7.1(b)(i), the employee is being paid an amount equal to at least 80% of the employee’s reference salary."

To meet the conditions, 80% of reference salary must be paid. If not:
5. The costs of employment in respect of which an employer may make a CJRS claim are costs which-
(a) relate to an employee-
 (i) to whom the employer made a payment of earnings in the tax year 2019-20 which is shown in a return under Schedule A1 to the PAYE Regulations that is made on or before a day that is a relevant CJRS day,
 (ii) in relation to whom the employer has not reported a date of cessation of employment on or before that day and
 (iii) who is a furloughed employee (see paragraph 6.1), and
(b) meet the relevant conditions in paragraphs 7.1 to 7.19 in relation to the furloughed employee.