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Coronavirus Job Retention Scheme – Frequently Asked Questions

Below are some of the frequently asked questions around the Coronavirus Job Retention Scheme (CJRS). For more details on this scheme, please refer to our blog.

What if I have an employee on unpaid leave?

Employees on unpaid leave cannot be furloughed, unless they were placed on unpaid leave after 28 February 2020.

What if I have an employee on Statutory Sick Pay (SSP)?

Employees on sick leave or self-isolating should get SSP, but can be furloughed after this. For details on how to reclaim the coronavirus SSP, check out our blog here.

Employees who are shielding in line with public health guidance can be placed on furlough if they are unable to work from home and you would otherwise have had to make them redundant.

What if my employee becomes sick while on furlough?

Furloughed employee retain their statutory rights, including their right to Statutory Sick Pay. This means that furloughed employees who become ill must be paid at least Statutory Sick Pay. It is up to employers to decide whether to move these employees onto Statutory Sick Pay or to keep them on furlough, at their furloughed rate.

If a furloughed employee who becomes sick is moved onto SSP, employers can no longer claim for the furloughed salary. Employers are required to pay SSP themselves, although may qualify for a rebate for up to 2 weeks of SSP. If employers keep the sick furloughed employee on the furloughed rate, they remain eligible to claim for these costs through the furloughed scheme.

What if my employee has more than one job?

If your employee has more than one employer they can be furloughed for each job. Each job is separate, and the cap applies to each employer individually.

Employees can be furloughed in one job and receive a furloughed payment but continue working for another employer and receive their normal wages.

What if I have employees on fixed term contracts?

Employees on fixed term contracts can be furloughed. Their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme.
Where a fixed term employee’s contract ends because it is not extended or renewed, you will no longer be able to claim the grant for them.

What if my employee does volunteer work or training?

A furloughed employee can take part in volunteer work or training, as long as it does not provide services to or generate revenue for, or on behalf of your organisation.

However, if workers are required to for example, complete online training courses whilst they are furloughed, then they must be paid at least the National Living Wage/National Minimum Wage for the time spent training, even if this is more than the 80% of their wage that will be subsidised.

What if I have an employee who is on Maternity Leave, contractual adoption pay, paternity pay or shared paternity pay?

If your employee is eligible for Statutory Maternity Pay (SMP) or Maternity Allowance, the normal rules apply, and they are entitled to claim up to 39 weeks of statutory pay or allowance.

If you offer enhanced (earnings related) contractual pay to women on Maternity Leave, this is included as wage costs that you can claim through the scheme.

The same principles apply where your employee qualifies for contractual adoption, paternity or share parental pay.

What about employee transfers under TUPE and on a change in ownership?

A new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 19 March 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.

Read more guidance on TUPE rules.

Read more guidance on business succession.

What salary do I base my claim on?

For employees on a fixed salary, whether they are full-time or part-time, the furlough payment will be based on their salary as in their last pay period prior to 19 March 2020.

If based on previous guidance, you have calculated your claim based on the employee’s salary as at 28 February 2020 (and this differs from their salary in their last pay period prior to 19 March 2020) you can choose to still use this calculation for your first claim.

For employees on variable salaries, i.e. zero hour contract workers or those who do overtime the claim will be the higher of:

  • The amount earnt in the same month last year
  • An average of the monthly earnings for the 2019-2020 tax year

What about overtime, fees, commissions, bonuses and benefits in kind?

You can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonuses (including tips) and commission payments should be excluded.

The reference salary should not include the cost of non-monetary benefits provided to employees as well as those benefits that reduce an employee’s taxable pay through salary sacrifice. Where the employer provides benefits to furloughed workers, this should be in addition to the wages that must be paid under the terms of the Job Retention Scheme.

How will this grant be treated for tax?

Payments received by a business under the scheme are made to offset the wages costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes.

Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.

Can a company director be furloughed?

We have written a separate blog on company directors, which can be found here.

What help is there if I’m self-employed?

We have written a separate blog for help for the self-employed which can be found here.

 

To find out more about the Coronavirus Job Retention Scheme read our blog here.

The content on this page is correct as at 16/04/2020. See terms and conditions.

Bryant House - Friend and Grant Chartered Acocuntants and Tax Advisors

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