Employer to contribute 25% towards furlough scheme from august

calcotti

The link to the revised Treasury Direction is here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/879484/200414_CJRS_DIRECTION_-_33_FINAL_Signed.pdf
clause 5 is essentially unchanged:

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.

I agee with Grumpy that I don’t see that this prevents at least some of a notice period being covered by CJRS.

EDIT: Jeremy pointed out below that I had inadvertently got the two versions of the Treasury Direction mixed up.

Grumpy_chap

Except I really don't understand the 5(a)(ii) at all... 
Definitely not plain English.

Jeremy535897

Grumpy_chap said:

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.

Not the same thing. Employment is only reported as ceased on the system for the purposes of 5(a)(ii) when the final FPS is done for that employee.

Grumpy_chap

FPS?  Sorry, not a term I know.  Are you saying that the employer can use CJRS funds to pay notice pay?  I think you are.

calcotti

Grumpy_chap said: Definitely not plain English.

It’s the most obscure document I’ve read in a long time!

Jeremy535897

Full payment submission via payroll software for RTI. Yes, I think an employer can pay a furloughed worker during their notice period and recover the cost through CJRS.

Grumpy_chap

Thanks Jeremy.  Not what I wanted to hear, nor do I think it is correct (morally) but thanks for providing the answer.

unholyangel

Grumpy chap & calcotti, I think you guys are getting confused.

Me broaching that point was intin regards to the comment saying the government are encouraging people to rehire even when no actual job exists for them. 

I was saying the official rules support that the rehiring and furloughing of employees was only ever intended to apply to certain circumstances. 

Jeremy535897

Grumpy_chap said:

Thanks Jeremy.  Not what I wanted to hear, nor do I think it is correct (morally) but thanks for providing the answer.

I don't promise to be right! I should mention that the quote you found was from the old Direction dated 15 April 2020. If you want to study it in detail, read the new one dated 20 May 2020 at:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/886959/CJRS_DIRECTION_No2___20_05_2020.pdf
which @calcotti kindly sent to me for bedtime reading. It now says:
"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."

I see "date" has changed to "day", for example, in 5(a)(ii). No doubt a learned barrister somewhere can explain why. I think calcotti accidentally linked to the old direction.

I don't claim that the government overtly said rehire people you don't want to keep long term, but I don't think they ever thought it would be restricted to cases where employers had made a finely balanced judgment to let someone go and rehired them in the hope of keeping their post once the CJRS was announced. That doesn't make sense when they extended it to voluntary leavers.

sharpe106

The main confusion is that government ministers have said you can furlough anybody for pretty much any reason but the treasury directive does not say that, and in several place says something completely different to what the directive said earlier on.