Update for employers: Recovery of furlough payments made to staff
LUKE HUTCHINGS >
Employment Law PartnerTue 21 April 2020
Following discussions between HM Treasury and Commissioners of Revenue and Customs, there has been an update for eligibility to reclaim furlough payments made to employees.
Employees (not workers) must have been on the PAYE system and showing on the HMRC’s “Real Time Information” as of 19 March 2020. The previous date given was 28 February, this has now been changed. Those made redundant between the two dates should be taken back on the books and then placed on furlough if the business wishes to become eligible to reclaim furlough payments in the future.
Importantly, and as before, employees who are working reduced hours or who had agreed a wage reduction already, may not be furloughed. Conversely, employees shielding at home or who have care responsibilities, and are not working, can be furloughed.
Finally and most importantly, the employee must have been instructed by the employer to cease all work in relation to their employment. Working, directly or indirectly (i.e. for a person connected with the employer) disqualifies staff from being treated as furloughed employees. The instruction must be given “by reason of circumstances arising as a result of coronavirus.”
The instruction must be given in writing and agreement or acceptance (presumably signed) needs to be obtained from the employee.
The HMRC portal for businesses seeking to furlough employees is now functioning and ready to accept submissions. Click here for more information on how to claim.
If you require any assistance with an employment law issue, please don't hesitate to get in touch. If you would like to get in touch with Luke Hutchings, our Employment Law Partner directly click here to view his contact details.
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