Employer to contribute 25% towards furlough scheme from august

calcotti

Jeremy535897 said:

calcotti said:

Grumpy_chap said:

Yes, but what employers are saying is that the notice payment is not redundancy payment.

Say you have been at a company for 5 years and you are aged 40.  You will get redundancy pay of 5 weeks' pay capped at £538 per week.  This is not taxed.

You will also get 5 weeks' notice.  This is taxed.  What employers are doing is using the 80% furlough to cover the bulk of the notice pay.  This seems wrong and not what the CJRS is for.

I hadn't thought of the notice period and there doesn't appear to be anything to exclude an employer using CJRS for that.

Normally employers and employees tend to part company before notice is up, hence PILONs. There will now be no use for them, because they no longer save tax, and may not qualify for CJRS, and the employee is on furlough anyway. So the logical approach now is to keep the employee on, furloughed, until the notice period expires. Not really within the spirit of CJRS, but the government actively supports similar behaviour by encouraging ex-employers who almost certainly have no job for their ex-employees to rehire those ex-employees and furlough them.

There could be an argument that if companies had to make people redundant and pay the notice periods that might push them over the edge financially so allowing CJRS to fund notice pay helps protect the business so that it still exists to come out of lockdown (albeit in a reduced form). 

ToxicWomble

I don’t  understand why people are going long distances for days out in the current situation - it’s not like anything is actually open, including public facilities.
It just seems pointless. I get that people want to get out and enjoy the weather and their 80% paid days off, but surely they can do that without driving more than 20 miles 

unholyangel

Jeremy535897 said:

calcotti said:

Grumpy_chap said:

Yes, but what employers are saying is that the notice payment is not redundancy payment.

Say you have been at a company for 5 years and you are aged 40.  You will get redundancy pay of 5 weeks' pay capped at £538 per week.  This is not taxed.

You will also get 5 weeks' notice.  This is taxed.  What employers are doing is using the 80% furlough to cover the bulk of the notice pay.  This seems wrong and not what the CJRS is for.

I hadn't thought of the notice period and there doesn't appear to be anything to exclude an employer using CJRS for that.

Normally employers and employees tend to part company before notice is up, hence PILONs. There will now be no use for them, because they no longer save tax, and may not qualify for CJRS, and the employee is on furlough anyway. So the logical approach now is to keep the employee on, furloughed, until the notice period expires. Not really within the spirit of CJRS, but the government actively supports similar behaviour by encouraging ex-employers who almost certainly have no job for their ex-employees to rehire those ex-employees and furlough them.

They've never actually said that though. Anytime the government have spoke about it, it's been in scenarios where (for example) they've let staff go before cjrs was announced or similar situations where the job still exists. They've never actually said you can take people on just to furlough (have no job for them) and I would say quite clearly it's not their intention or they wouldn't have the cut off date as the day before the scheme was announced. 

The official direction given to HMRC supports the limited application in such a scenario as you cannot claim for any employee who you have sent a leaving date for and no claim must be made if it is abusive or  contrary to the exceptional purpose of cjrs. 

Grumpy_chap

unholyangel said:

The official direction given to HMRC supports the limited application in such a scenario as you cannot claim for any employee who you have sent a leaving date for and no claim must be made if it is abusive or  contrary to the exceptional purpose of cjrs. 

@unholyangel - can you provide a link to this guidance please?

calcotti

Grumpy_chap said:

unholyangel said:

The official direction given to HMRC supports the limited application in such a scenario as you cannot claim for any employee who you have sent a leaving date for and no claim must be made if it is abusive or  contrary to the exceptional purpose of cjrs. 

@unholyangel - can you provide a link to this guidance please?

I second that request because I couldn't find any such restriction when I looked for it earlier (which is not to say it doesn't exist).

Jeremy535897

calcotti said:

Grumpy_chap said:

unholyangel said:

The official direction given to HMRC supports the limited application in such a scenario as you cannot claim for any employee who you have sent a leaving date for and no claim must be made if it is abusive or  contrary to the exceptional purpose of cjrs. 

@unholyangel - can you provide a link to this guidance please?

I second that request because I couldn't find any such restriction when I looked for it earlier (which is not to say it doesn't exist).

The last bit is a direct quote from paragraph 2.5 of the Direction, but I've never seen the leaving date point either.

unholyangel

Grumpy_chap said:

unholyangel said:

The official direction given to HMRC supports the limited application in such a scenario as you cannot claim for any employee who you have sent a leaving date for and no claim must be made if it is abusive or  contrary to the exceptional purpose of cjrs. 

@unholyangel - can you provide a link to this guidance please?

It's not guidance. It's direction. As in the rules laid out by treasury to HMRC

 

The point about the leaving date is covered by 5a(ii). 

Grumpy_chap

OK, thanks.  Can you provide a link to the Direction?

Grumpy_chap

I think I found it...

Qualifying costs
5. The costs of employment in respect of which an employer may make a claim for payment under CJRS 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 date, and
(iii) who is a furloughed employee (see paragraph 6), and (b) meet the relevant conditions in paragraphs 7.1 to 7.15 in relation to the furloughed employee.

Who does the employer have to have reported the cessation to?  Is that to HMRC as part of final RTI?  I do not know how that reporting works but, say the notice period is 10 weeks, they could cover 8 weeks over two months without reporting and the last two weeks could be paid before the next monthly RTI.  Maybe I interpret that totally incorrectly.  Sorry, I don't really understand what is written there.

gettingtheresometime

JamoLew said:

We will be back in full lockdown by then if the idiots cant stick to the rules and insist on flocking  to destinations for a day trip  etc etc
My patience is running very thin with this element of society who think the rules don't apply to them -- hope they all lose their jobs and end up losing everything because that's what they deserve with the way they are acting.
I have played by the rules for the last 10 weeks and not sure I could manage another 10 like that

Actually my patience has evaporated with people who are twisting the very clear guidelines to justify their own actions.

My neighbour is having a party in their garden tonight & the only reason I'm annoyed is that we're not invited.

might as well all go back to work on Tuesday because no one will have any respect for the guidelines after the last 48hrs