CJRS Claims and Holiday – Christmas Focus – Plus new HMRC disclosure of claims

There has been a lot of talk in recent weeks regarding the upcoming Christmas break and the interaction with the Coronavirus Job Retention Scheme (‘CJRS’) with some employers planning to place their employees on furlough while they are on holiday over the Christmas period.
 
The purpose of the extended CJRS is to provide financial support to employers who have been forced to close their businesses or faced a downturn in the volume of work available for their employees due to the resurgence of coronavirus.  The guidance is clear that employees should not be placed on furlough for a period simply because they are on holiday for that period.
 
Employees who are genuinely furloughed due to their employment activities being adversely affected by the pandemic or the measures taken to restrict further transmission can take holiday during their period of furlough without affecting the CJRS grant available.  This holiday can be taken at the request of the employee or, provided the appropriate notice is given, at the employer’s request.  Employees should be paid at their normal rate for any period of holiday with the claim for the CJRS grant being restricted to the grant amounts, currently 80% of their usual pay.
 
Some practical examples:                                              

• An employee has been on furlough throughout November and December due to there being no work available.  The employee has already booked holiday over the Christmas period.  As the holiday is within a much longer furlough period a CJRS grant claim can be made for the period of holiday with the employer funding the top up to 100% of normal pay.

 

• A business has historically opened its offices over the Christmas period (except for Bank Holidays) for staff to attend work.  Due to the coronavirus pandemic there is less work available for employees and therefore the employer decides to give employees notice that the office will close for two full weeks over Christmas and they are required to take holiday.  As long as there is clear evidence that the closure is caused by the coronavirus pandemic directly leading to a reduction in the need for the activities of the employees, then the employer will be able to furlough the staff for this period and claim a grant under CJRS.

 

• A factory has shut down its operations over Christmas for the last five years with employees taking the time off out of their annual holiday entitlement.  As this is an annual occurrence it is likely to be viewed by HMRC as standard practice and therefore not as a result of the current coronavirus pandemic.  A CJRS grant claim should therefore not be made in these circumstances.

 

• A business has plenty of work available and an employee asks for a week off over Christmas, the request is granted and the employer wishes to furlough the employee for the period of holiday.  As the employee is being placed on furlough purely because they are taking holiday then a CJRS grant claim should not be made.

 
Employers deciding to place employees on furlough over Christmas should therefore proceed with care, taking into account the guidance available.  The CJRS Treasury Direction includes a clause that states no CJRS claim may be made in respect of an employee if it is abusive or is otherwise contrary to the exceptional purposes of CJRS.  HMRC has said that it will be checking claims and challenging employers on their reasons for placing employees on furlough to ensure the claim is valid.
 
Finally, employers should also be aware that HMRC have announced that they will be publishing details of CJRS claims made for periods from 1 December 2020.  This will include the employers’ name and Companies House reference (where relevant) together with the value of the claim within set bands which can be found here. Employees will also be able to see on their Personal Tax Account whether a claim has been made for them by their employer.
 
We are here to help, so if you any queries or wish to discuss the above then please contact us.