HM Revenue & Customs publishes detailed guidance on calculating furlough claims from July onwards

HM Revenue & Customs has published detailed guidance on the operation of the Coronavirus Job Retention Scheme (CJRS) from 1 July 2020 onwards, including examples of how to calculate claims for the new flexible furlough option.

The CJRS currently provides grants to employers covering 80 per cent of the usual wages of furloughed employees – who remain on the payroll but must not carry out any work – up to a cap of £2,500 a month as well as employer National Insurance Contributions (NICS) and pension contributions.

However, from 1 July employers will be able to make new flexible furlough agreements with employees that enable them to return to work on a part-time basis, while the employer will still be able to claim a CJRS grant for the hours not worked. Only employees who have been furloughed for a full three-week period up to this point will still be eligible to be furloughed.

From 1 August, CJRS grants will cease to cover the costs of employer NICs and pension contributions in respect of furlough pay.

Then, in September, the value of CJRS grants will reduce to 70 per cent of furloughed employees’ usual wages, with employers required to top-up the remaining 10 per cent so that furloughed employees still receive 80 per cent of their usual wages, capped at £2,500 a month.

Finally, October will see the value of CJRS grants fall to 60 per cent of furloughed employees’ usual wages, with employers having to contribute the remaining 20 per cent.

Employers are responsible for calculating the correct amounts to claim from the scheme, with HMRC expected to take a hard line on errors that are not corrected quickly.

The new guidance walks employers through the various calculations needed to work out the amounts they need to claim in respect of furloughed employees in different circumstances over the remaining months of the scheme.

This includes information about:

  • Calculating flexible furlough claims;
  • calculating employer NICs and pension contributions on hours worked and furlough hours;
  • dealing with considerations around the National Living Wage (NLW) and National Minimum Wage (NMW);
  • employees returning from parental leave;
  • employees returning from Statutory Sick Pay (SSP) and
  • the reduction in the value of the main grant in September and October.

To help employers deal with the potentially wide range of permutations, HMRC has published example calculations dealing with different situations.

Where employers find that they have overclaimed, they can report this as part of their next claim, which will be adjusted down to take the previous overpayment into account. HMRC says it is working on a mechanism to deal with circumstances where an employer has overclaimed but does not wish to make further claims. In the event of underclaims, employers should contact HMRC directly.

As part of the changes to the scheme, HMRC has also confirmed that claims for periods ending up to 30 June must be made by 31 July, while claims periods from 1 July onwards must begin and end in the same calendar month and last at least seven days. If an employee is furloughed in June and continues to be furloughed for their full hours in July, separate claims will need to be submitted, even if this differs from an employer’s own pay periods.

Further clarification issued on eligibility for second round of Self-Employment Income Support Scheme

HM Revenue & Customs (HMRC) has issued further details of eligibility for the second round of the Self-Employment Income Support Scheme (SEISS), which will provide taxable grants to self-employed individuals.

The grants will be 70 per cent of average monthly trading profits, capped at £6,570 and paid in a single instalment.

HMRC has now clarified that in order to qualify for the second grant, a self-employed individual must confirm that their trading has been adversely affected by the coronavirus outbreak on or after 14 July 2020.

This means it is possible for a self-employed individual not to have qualified for the first round of funding by virtue of not having been adversely affected, but to qualify for the second round because they have subsequently been adversely affected. This might be in circumstances where they become unwell with Coronavirus in July and are then unable to trade as a consequence.

However, this also means that some self-employed individuals who were able to confirm that their business was adversely affected for the first round of funding may find that this is no longer the case and so do not qualify for the second round of funding.

The criteria to qualify for the scheme otherwise remain unchanged and apply to self-employed individuals and members of partnerships:

  • you traded in the tax year 2018 to 2019 and submitted your Self-Assessment tax return on or before 23 April 2020 for that year
  • you traded in the tax year 2019 to 2020
  • you intend to continue to trade in the tax year 2020 to 2021
  • you carry on a trade which has been adversely affected by coronavirus

Applications for the current round of funding, worth 80 per cent of monthly trading profits and capped at £7,500 in total remain open here until 13 July 2020.

Meanwhile, details of the second round of funding will be published at a later date.

Chancellor unveils changes to furlough scheme

The Chancellor, Rishi Sunak, has announced a series of changes to the Coronavirus Job Retention Scheme (CJRS) from July that will see furloughed employees able to return to work part-time, but with the value of Government support reducing gradually from August.

Meanwhile, the scheme will, in effect, close to employees who have not previously been furloughed from 10 June, before closing completely at the end of October.

A system of ‘flexible furloughing’ will come into effect from 1 July, allowing employers to bring back furloughed employees for any amount of time on any shift pattern, while still able to claim a grant in respect of the time not worked when they otherwise would.

Employers will have to pay employees at their usual rate of pay for any hours they work, while also covering the cost of Employer National Insurance Contributions (NICs) and minimum employer automatic enrolment pension contributions that this pay attracts.

They will need to reach new flexible furlough agreements with any furloughed employees brought back on a part-time basis.

From 1 August, CJRS grants will cease to cover Employer NICs and pension contributions, with this cost passing to employers. The grant will continue to cover 80 per cent of furloughed employee’s usual wages, up to a cap of £2,500 a month.

However, from 1 September, the value of the grant will fall to 70 per cent of a furloughed employee’s usual wages, capped at £2,187.50 a month. Employers will be expected to contribute the remaining 10 per cent plus NICs and pension contributions to reach a combined total payment to the employee of 80 per cent of their usual wages, up to a cap of £2,500 a month.

October will see the value of the Government contribution fall again to 60 per cent, capped at £1,875 a month, with employers expected to contribute 20 per cent of a furloughed employee’s usual wages plus NICs and pension contributions to reach the total of 80 per cent, capped at £2,500 a month.

At the same time, the Chancellor confirmed the closure of the scheme to new entrants from 30 June. After this point, employers will only be able to furlough employees who have been furloughed for three full weeks at any point before 30 June.

This means the last day an employer can furlough an employee for the first time will be Wednesday 10 June.

Furthermore, after 30 June, employers will not be able to claim for more employees in a claim period than the maximum number they have claimed for in any period under the scheme in its current format.

Full details of how the scheme will operate from this point are expected to be announced on 12 June 2020.

The announcement comes against the background of an easing of the lockdown restrictions that have closed down large sections of the economy since late March, with the Government now encouraging certain sectors back to work.

The CJRS was announced by the Chancellor in March and currently allows employers to furlough any employees who were on a PAYE payroll and reported to HM Revenue & Customs (HMRC) through the Real-Time Information (RTI) system by 19 March 2020.

Since then, more than a million employers have collectively claimed £15 billion from the scheme in respect of 8.4 million employees, via the Government’s online portal.

The announcement comes days after the Chancellor issued a new Direction to HMRC, updating the record-keeping requirements of the scheme.

Under these requirements, the written agreement that the furloughed employee will, under the current terms of the scheme, cease all work must be retained until 30 June 2025 and:

  • State the main terms and conditions;
  • Be incorporated either expressly or implicitly in the contract of employment; and
  • Be either made or confirmed in writing.

It is widely expected that HMRC will audit use of the scheme retrospectively over the coming months and years, with potentially hefty penalties for those found to have acted improperly.

What happens if my employees have to self-isolate following contact tracing?

Following the launch of the Government’s contact tracing system, employers should be prepared for the possibility of multiple employees being required to self-isolate if one employee from the workplace tests positive for Coronavirus.

This means it is vital that employers are aware of the arrangements concerning Statutory Sick Pay (SSP) and self-isolation.

Changes to the regulations that were implemented after the outbreak hit the UK mean that self-isolating employees are entitled to SSP from the first day of absence, if they cannot work from home.

Employers can claim a grant to cover the cost of SSP resulting from Coronavirus for up to two weeks per employee.

Where a self-isolating employee does not have symptoms, is otherwise fit to work and can work from home, they should continue to do so on full pay.

Acas launches new guidance on mental health in the workplace during COVID-19

Acas has published new guidance to help businesses manage mental health in the workplace during the current pandemic.

It comes after a new Acas-commissioned YouGov survey found that nearly two out of five employees working from home felt stressed, anxious or experienced mental health difficulties.

To help you manage your team’s wellbeing during this crisis, we have summarised the Acas guidance below.

How can staff manage their mental health?

Whether staff are working from home, returning to the workplace or on furlough, employers have a responsibility to ensure their welfare needs are met.

Staff may be finding it hard to cope and be suffering a decline in mental health and wellbeing due to longer hours, social isolation, childcare responsibilities or work pressure.

Where a staff member has an existing mental health problem it’s important that they talk to their manager about how they’re feeling, so that extra support can be offered.

Staff can improve their mental health by:

  • staying in contact with people
  • creating a daily routine to manage their time
  • keeping active and exercising
  • reflecting on what helps them feel positive and what does not.

Encourage staff to talk to their manager

Acas advises that staff members talk to their manager or employer regularly about their situation and how they are coping. Employers should, in turn, help them to work through any problems.

It is advised that employers discuss with staff what kind of contact they would prefer to ensure it meets the needs of their team, this could include regular calls, video conferencing or even having online social events.

Back to the workplace

Staff returning to a place of work outside their home should discuss any concerns around how health and safety that could affect their mental wellbeing. Managers should take these concerns into consideration and be supportive, wherever possible.

Employer support

Employees should check with their employer what support is available if they have concerns about their mental health.

Employers must remember that they have a ‘duty of care’ to all employees, regardless of where they are working. This means that they must do all they reasonably can to support their staff members’ health, safety and wellbeing.

In some workplaces this may mean offering counselling, often through an Employee Assistance Programme (EAP), appointing a mental health ‘champion’ or working with other organisations to create a mental health support group.

Discrimination

Mental health issues can be considered a disability under the law if all of the following apply:

  • it has a ‘substantial adverse effect’ on the life of an employee
  • it lasts at least 12 months, or is expected to
  • it affects their ability to do their normal day-to-day activities.

This applies even if there are not symptoms all of the time or the symptoms are less severe at some times than at others.

Employers must be careful not to discriminate against a person because of a mental health disability, as it is a protected characteristic. Instead, they should work with employees to make appropriate adjustments to working arrangements for them.

 

COVID-19 – An assessment of safe working arrangements

As a result of the Coronavirus pandemic, businesses must assess how their work environment and arrangements can be made safe for employees and visitors.

In response to the Government guidance, we have put together guidelines on the steps you may need to take as a business to provide safe working arrangements.

COVID-19 risk assessment

All employers with more than five members of staff must carry out and share with staff their written risk assessments. Employees should also be given clear, written guidelines on safe working.

Those with 50 or more employees are expected to publish this document on their website and display a signed poster, which can be found here.

Any risk assessment must consider and provide information on:

  • Scenarios that could lead to transmission of the virus
  • Steps a business may take to mitigate risk

Remember – As per the Government’s latest guidance, where possible, employees should continue to work from home if they can. This is particularly important for vulnerable groups.

As an employer, you have a legal duty to protect your employees and others that visit your business, from harm.

Precautions for those returning to work

Where possible you should try and ensure as many employees as possible can continue to work from home, as per the Government’s guidance.

Where employees cannot work from home, you should increase the frequency of handwashing and surface cleaning to prevent the spread of this virus.

Staff must also maintain the two-metre social distancing guidelines and you should consider reconfiguring workspaces to help with this where required.

Where social distancing cannot be observed due to the work environment other measures may need to be taken.

Detailed guidance on the various precautions recommended for different workplaces can be found by clicking here.

We recommend that you read these guidelines and consider how you can incorporate these measures into your work arrangements.

Vulnerable employees and visitors

The Government has advised that all vulnerable individuals, such as those with underlying health conditions or in at-risk groups, should remain at home and not return to work.

Where this is not possible, you should ensure that additional caution is taken to observe social distancing rules.

You should continue to follow and monitor Government guidance to ensure vulnerable groups remain protected.

It is important that you do not discriminate against those required to self-isolate or shield, taking into consideration the protected characteristics defined under the Equality Act 2010 (e.g. due to their age or disability).

Allowances should also be given for those who live with or care for someone that is extremely vulnerable.

If you believe an employee may fit into one of these groups, we recommend that you speak with them to ensure the necessary steps can be taken to provide a safe work environment.

Cleaning procedures

All workspaces must be cleaned regularly, and, where possible, windows and doors should be opened regularly to encourage ventilation.

Care must also be taken in respect of the delivery of merchandise or goods that enter the workplace so that they can be cleaned to prevent the spread of the virus.

Where required, additional signage should be installed to remind employees to regularly wash their hands and use hand sanitiser/wash stations provided.

The working environment

As well as encouraging more frequent cleaning, you may be required to take additional measures around the workplace to ensure staff and visitor safety.

This may include:

  • Reducing movement by discouraging non-essential trips within buildings and sites, for example, restricting access to some areas, encouraging the use of telephones, where permitted, and cleaning them between use.
  • Reducing job and location rotation.
  • Introducing more one-way flow through buildings.
  • Regulating the use of high traffic areas including corridors, lifts, turnstiles and walkways to maintain social distancing.

Within specific work areas, you may also be required to:

  • Review layouts and processes to allow people to work further apart from each other.
  • Use floor tape or paint to mark areas to help workers keep to a two-metre distance.
  • Only where it is not possible to move workstations further apart, arranging people to work side by side or facing away from each other rather than face-to-face.
  • Only where it is not possible to move workstations further apart, using screens to separate people from each other.
  • Managing occupancy levels to enable social distancing.
  • Avoid the use of hot desks and spaces and, where not possible, for example, call centres or training facilities, cleaning and sanitising workstations between different occupants including shared equipment.

You should also consider common areas of the building, such as waiting areas and break rooms, and take actions to manage risk, including:

  • Staggering break times to reduce pressure on break rooms or canteens.
  • Using safe outside areas for breaks.
  • Creating additional space by using other parts of the workplace or building that have been freed up by remote working.
  • Installing screens to protect staff in receptions or similar areas.
  • Encouraging workers to bring their own food.
  • Reconfiguring seating and tables to maintain spacing and reduce face-to-face interactions.
  • Regulating the use of locker rooms, changing areas and other facility areas to reduce concurrent usage.
  • Encouraging storage of personal items and clothing in personal storage spaces, for example, lockers.

You should take these measures, and include them within your risk assessment, as and when required to maintain proper social distancing and to reduce the risk of infections.

Travel and commuting

Employees returning to work should be asked to avoid public transport where possible to reduce the spread of the virus.

Employees should also be reminded to maintain a distance of two metres if required to use public transport.

To assist with the travel to and from work, further measures may be taken including:

  • Staggering arrival and departure times at work to reduce crowding into and out of the workplace, taking account of the impact on those with protected characteristics.
  • Limiting passengers in corporate vehicles.
  • Reducing congestion, for example, by having more entry points to the workplace.
  • Using markings and introducing one-way flow at entry and exit points.
  • Providing handwashing facilities or hand sanitiser at entry and exit points and not using touch-based security devices such as keypads.
  • Defining process alternatives for entry/exit points where appropriate, for example, deactivating turnstiles requiring pass checks in favour of showing a pass to security personnel at a distance.

Employers should discuss any changes to travel arrangements if they believe it may affect their regular working hours.

Personal protective equipment (PPE) and face coverings

As part of the risk assessment process, you should review the use of PPE and face coverings in the workplace and if they are required request that staff use the correct equipment.

If employees indicate that they would like to use a face covering at work, you should remind them to thoroughly wash their hands before putting a mask on or taking a mask off.

Face masks should also be replaced after each use. They do not replace the need for proper social distancing at all times.

Working arrangements 

Should you need to introduce shift patterns or change existing working arrangements as employees return to the workplace, you should give those workers affected plenty of notice beforehand.

If staff have any queries regarding a change to working arrangements, they should be encouraged to speak with you at the earliest opportunity to see how you can assist them.

Communication

Any changes to work arrangements or the work environment should be properly communicated with your employees and you are encouraged to consult with them, trade unions and health and safety representatives when preparing a risk assessment.

Once your risk assessment has been prepared you should share it with your employees so they are aware of the steps they need to take and the measures that you are introducing.

 

Coronavirus Job Retention Scheme (CJRS) extended until October

The Chancellor, Rishi Sunak, has confirmed that the Coronavirus Job Retention Scheme (CJRS) will be extended until the end of October, with no changes until the end of July when employers currently using the scheme will be able to bring back furloughed employees part time.

From August, the Government has said that furloughed workers will continue to receive 80 per cent of their usual salaries capped at £2,500. However, employers will have to make a currently unspecified contribution to this cost. Details of these arrangements are due to be published by the end of May.

The CJRS currently allows employers to retain employees on the PAYE payroll who are not carrying out work for them by placing them on furlough and to claim a grant of 80 per cent of a furloughed employee’s usual pay, plus employer National Insurance Contributions (NICS) and minimum employer auto-enrolment pension contributions.

The Chancellor said that since the scheme was launched in March, more than one million businesses have furloughed more than 7.5 million workers.

Headteacher wins his Employment Tribunal

A school headteacher who was dismissed from his job after he carried a pupil out of a classroom has won his claim for unfair dismissal.

David Dee, who held the top job at Cedars Park Community Primary, in Stowmarket, Suffolk, had initially been charged with common assault after picking up a girl who had refused to leave a lesson.

Although a Magistrates Court acquitted Mr Dee, he nonetheless lost his job nine months later after governors branded his actions “dangerous and irresponsible.”

Now he has won his case at an Employment Tribunal and is set to receive compensation.

Chris McGovern, a former headteacher who now chairs the Campaign for Real Education, said: “The governing body of his school should be hanging their heads in shame. It is just appalling.

“It is no wonder that it is so difficult to recruit headteachers and so many are leaving the profession. They need to be supported.”

The Tribunal had heard that a student teacher had asked for help in dealing with a pupil who had been accused of hitting a classmate with a plastic pen pot.

The girl in question had refused to leave the classroom, prompting Mr Dee to lift her out of her chair and carry her away under his arm.

At a Tribunal at Bury St Edmunds, he had admitted having “gone too far” in his handling of the situation but argued his actions did not amount to gross misconduct.

A Judge concluded that it was some time after the original incident, in April 2014, that the claimant had been asked to give an account of what had happened. Questions were also raised about the impartiality of the school’s internal investigation, which had led to his dismissal the following summer.

Suffolk County Council declined to comment.

For expert advice on pursuing a Tribunal claim, please contact the head of our Employment team Susan Bernstein or visit our website.

Police officer who felt “forced to resign” locked in discrimination row over weight gain

A police officer who claims she was “forced to resign” after being “over-scrutinised” for her weight gain is challenging Surrey Police at an Employment Tribunal.

Detective Constable Rebecca Tiffin, who first joined the Police in 2001, has said that Surrey Police pressured her to pass a “bleep test” fitness exam on several occasions, at a time when she was experiencing a series of mental and physical health problems.

Ms Tiffin, who failed the test in question, told the Tribunal that her weight gain could be attributed to an underactive thyroid gland, stress, anxiety and post-natal depression – and that her employer had put undue pressure on her during a difficult time.

“I believe that I was subject to an intimidating, degrading, humiliating and offensive environment in work that related to my disabilities,” she told the Tribunal.

“I have had a longstanding history of depression, stress and anxiety conditions dating back to 2007 and more recently in 2013.

“I had been trying to improve my fitness following a running plan, but I struggled,” she said.

After failing to pass the test on more than one occasion, Ms Tiffin was made subject to an Unsatisfactory Performance Procedure – which can, in some instances, lead to an officer being subsequently dismissed.

She told a Tribunal that she felt “forced to resign” after this event and that she had been consistently discriminated against on grounds of her “disabilities”.

In response, Surrey Police said that Ms Tiffin had not made it clear to them from the outset that her failure to pass the bleep test could be attributed to her disabilities or depression.

A spokesperson added that the bleep tests had been specifically introduced as standard procedure to ensure that all officers were fit to perform at all times.

The Tribunal continues.