The latest on the Direction for HMRC on the JRS

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The latest on the Direction for HMRC on the JRS

The latest on the Direction for HMRC on the JRS

On 15 April 2020 the Treasury issued a Direction to HMRC setting out the detail of the Coronavirus Job Retention Scheme. Somewhat surprisingly, there are inconsistencies between the Direction and the HMRC Guidance (which was updated again on 17 April 2020) .

One of the key issues is that, according to the Direction, in order for an individual to be furloughed, there must be a written agreement between the employer and employee that the employee will cease all work in relation to their employment. This requirement is not included within the HMRC Guidance (which simply requires the employer to record the decision to furlough in writing).

This is an issue for many employers who furloughed employees before the Direction was published. If written agreement was not previously obtained from an employee, strictly speaking, employers should now write (email or text will be acceptable) to employees and seek agreement.

"What the Direction did do was to answer the key question ‘does the reason for furloughing the employee matter?’."

The answer is now very clearly, yes. The instruction by the employer to cease work must be “by reason of circumstances arising as a result of coronavirus or coronavirus disease”. If it arises for any other reason, the employee is not furloughed within the meaning of the Scheme.

In other news, it has been confirmed that the Scheme will remain in place until the end of June 2020, and it is now clear that employees will both accrue holiday (this was never really in doubt) and can take it during the furlough leave period (provided any holiday is paid at an employee’s normal salary).

HMRC has also published two new guidance documents:

Click here for a step by step guide for employers on how to claim under the CJRS and the processes they will need to follow.

Click here for a guide to calculating 80% of an employee’s wages for the purpose of claiming under the JRS.

See below for further guidance from the HMRC: 

Click here for the HMRC guidance for employers.

Click here for the HMRC guidance for employees.


If your business needs legal support with any issues arising from COVID-19, please get in touch with Jon Taylor.

All information in this document is accurate at the time of writing. It is meant for general information only and is not legal advice.