Update Job Retention Scheme

Latest guidance from HMRC on Furloughing through the Job Retention Scheme

21 April: In week 5 of the UK lockdown, here is our update on the Government’s guidance on how Furloughing under the Job Retention Scheme will work:

A few highlights:

  • The Scheme has now been extended to 30 June from the original date of 31 May
  • Minimum furlough period – 3 weeks
  • Claim to be initially based on salary as at 28 February 2020, but with more variations which effectively mean an employee needed to be part of an RTI upload before 19 March
  • The CRTS Portal opened on 20 April, with a few curve balls for everyone in the way the calculations are made, for example
    • Furlough pay calculated on a calendar day basis rather than a working day basis and
    • The allocation of ER NIC and ER pension
  • If salary is variable, can be based on average over the course of 19/20 to date or on same month last year
  • No provision made for the many director shareholders on low salary plus dividends – the £719 per month salary
  • Employees on SSP cannot be furloughed, but can be as soon as they return to work
  • Employees who are shielding ‘in line with public health guidance’ can be furloughed
  • Employer’s NI and employer’s pension contributions at the minimum auto enrolment rate (currently 3%) can be claimed on top of the 80%/£2,500, but only those contributions based on the 80%/£2,500
  • It still appears that it will be difficult to justify a director in a small business furloughing themselves

Karen Keeling, Dafferns Tax Director: The Government calculator seems to only deal with simple examples and few of our clients are simple…

Click here to access the full guidance.

If you have any questions, please contact Karen Keeling