The treasury has issued a Direction to HMRC under powers granted by the Coronavirus Act 2020, containing authority and instructions for making payments under the Coronavirus Job Retention Scheme possible.
The main points of the Direction are:
- Confirmation of the new qualification date of 19 March 2020 from the previous 28 February 2020.
- The scheme is not limited to those who would otherwise be made redundant. This is very different from its initial inception. It is applies to any who are furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease”.
- The employer and employee must agree in writing that the employee will cease work. This agreement can be an email. More than notification is required.
- The amount of salary for the employee must disregard anything which is not “regular salary or wages”. That includes disregarding any performance related bonus or discretionary payments (including tips), any conditional payments (e.g. where a threshold must be met) and any non-financial benefits.
- A furloughed director of a company can only undertake work to fulfil a duty or other obligation arising by or under an Act of Parliament relating to the filing of company accounts or provision of other information relating to the administration of the director’s company. This is a very narrow interpretation of directors’ duties.
- The employer cannot claim for any salary which is “conditional on any matter”.
- There is nothing on annual leave in the Direction.
The full Direction can be found here.