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Coronavirus Guidance – 15 May 2020

Article Date: 15 May 2020

Coronavirus Guidance – 15 May 2020

On 14th May, HMRC published updates to existing guidance and two new guidance documents.

The summary of what is new is set out below;

The first document is an update of an existing guidance previously issued on 4th April and originally issued on 26th March.

It is set out below.

Check if you can claim for your employees' wages through the Coronavirus Job Retention Scheme

The main changes in the update are as follows;

  1. It extends the furlough scheme from 30 June 2020 to 31 July 2020

 

  1. It foretells of an extension to the furlough scheme to 31 October 2020 and of an intention to require employers to contribute to the furlough cost – no details are known of what this contribution may be

In addition, the guidance focuses heavily on what employees can and cannot do when furloughed.

You should note that HMRC are currently receiving many calls from employees reporting their employers for breaches of the furlough guidance, requiring employees to work during furlough.

HMRC will review these matters and will act accordingly.

Notwithstanding HMRC and its powers, employers are reminded that social media will seek to direct consumers away from employers who deliberately breach these guidelines. This may be equally as damaging to the business in future as COVID 19 is currently.

The second document is a new document.

It is set out below.

Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme

It supplements document 1 in that it sets out “which employees you can put on furlough” which was previously in the earlier versions of document 1.

There is nothing new in the document.

The third document is an update of an existing guidance previously updated on 4th April and 15th April and originally issued on 26th March.

It is set out below.

Claim for wages through the Coronavirus Job Retention Scheme

There is nothing new in the document.

However, employers are reminded that HMRC make clear reference to retaining all furlough records for 6 years. It is likely that this request is the precursor to a review by HMRC PAYE in due course.

ASE has two strategies to offer to help with regard to furlough claims;

  1. Post return to work ASE will offer to review all furlough transactions to ensure that the rules have been complied with correctly; where there are errors ASE will work with clients to refile claims and to claim additional sums or repay monies incorrectly received (if any).

 

ASE will offer this service at a discount to audit clients who have fee protection cover (see below)

 

  1. In the event of a review of furlough arrangements by HMRC, ASE will work with the client to resolve queries.

Most clients will benefit from the ASE fee protection policy offsetting all professional fees.

The fourth document is an update of an existing guidance originally issued on 17th April.

It is set out below.

Work out 80% of your employees' wages to claim through the Coronavirus Job Retention Scheme

There is nothing new in the document.

HMRC have set out clear examples of what are non-discretionary payments (commissions); these are defined as being contractual obligations over which the employee has an enforceable right.

This will not include discretionary overtime payments.

The fifth document is a new document.

It is set out below.

Examples of how to work out 80% of your employees' wages, National Insurance contributions and pension contributions

It sets out a series of worked examples of furlough pay and is self-explanatory.

The sixth and final document is a new document directed at holiday entitlements and holiday pay.

It is set out below.

Holiday entitlement and pay during coronavirus (COVID-19)

There is quite a lot of new information in this update.

Specifically;

  1. Employers are reminded that they require an employee to take holiday or cancel holiday in accordance with statutory provisos.

 

  1. Where an employee is furloughed and is on holiday, the rate of holiday pay should be calculated. If this is above the rate of pay whilst furloughed, the employer is able to claim the 80% grant but must pay the additional holiday difference.

 

It is suspected that many employers will have not taken this into account in submitting March and April furlough claims.

 

  1. The guidelines provide clarity about carrying forward unused holiday for a period of up to 2 years.

 

The guidelines state that there is no formal procedure as to how this is accomplished requesting that the employer informs employees and acts accordingly.

 

In addition, the guidelines indicate that where an employee is furloughed, it would be expected that the employee would use some or all of their annual holiday leave during the period of furlough.

 

Payment in lieu of holiday is not encouraged unless the employee is leaving employment.

As with all updates, if you require further assistance please do not hesitate to contact Chris Cummings (chris.cummings@ase-global.com), Martin Redfern (martin.redfern@ase-global.com) or Michelle Malone (michelle.malone@ase-global.com).

Or visit our LinkedIn page for more info:https://www.linkedin.com/company/ase-plc/

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