HMRC’s 5th Treasury Direction – what’s still missing?

HMRC’s 5th Treasury Direction – what’s still missing?

Key Contact: Claire Knowles

Author: Rebecca Mahon

On Friday 13 November, we were gifted the 5th Treasury Direction on the Coronavirus Job Retention Scheme (CJRS). It applies to the extended scheme, which runs from 1 November 2020 – 31 March 2021 (albeit the 5th Treasury Direction only covers the period up until 31 January 2021).

The Treasury Direction “firms up” a number of things that we already had an idea of following the government guidance which accompanied the announcement of the extension. However, there are some frustrating gaps so once again, we are left awaiting further guidance to clarify.

The key “missing points” are:

  • Whether or not information regarding use of the scheme in November will be published online

The Treasury Direction confirms that HMRC will publish information about employers who receive CJRS payments for claim periods in December 2020 or January 2021. We assume that this means that HMRC won’t publish information about claims made for November, however this is not expressly stated, and it’s not immediately clear why this distinction has been made. Businesses will be aware that the government is coming under increasing pressure to be transparent about where taxpayer money is being spent, in light of recent revelations regarding the award of PPE contracts over the last few months. As such, we wouldn’t be surprised to learn that wider records regarding which employers have made use of the CJRS will be published in due course.

  • Whether an employer can claim for an employee working their contractual notice in November 2020

Between the Treasury Direction and the latest employer and employee government guidance, we are now clear that an employer cannot claim on or after 1 December in respect of any employee serving contractual or statutory notice (including any employees who have retired or resigned). What remains unclear is whether an employer can claim for employees who are working a contractual notice period in November (the latest guidance for employers says you can claim for a statutory notice period being served in November, albeit please note pay would need to be topped up to 100% in circumstances where an employer is only obliged to provide statutory notice). As per our previous guidance note, we would recommend that any employers who consider that they may need to make dismissals in the lead up to Christmas should serve notice sooner rather than later in order to make the most of the ambiguity in the guidance for November.

  • If employees that transfer to an employer under TUPE following a service provision change can be furloughed

Like in the 3rd Treasury Direction, the language adopted in the 5th Treasury Direction when referring to eligibility following a TUPE transfer is that of a “business transfer”, not a service provision change. However, following the publication of the 3rd Treasury Direction, we made our own enquiries of HRMC on this point. The HMRC adviser we spoke to confirmed that, in their view, an employee that transfers pursuant to TUPE (whether due to a business transfer or service provision change) would be able to be furloughed by the new employer, provided that they satisfy the eligibility requirements set out in the Direction (now being that the employee must have been employed by the transferor prior to 31 October, and transferred to a new employer after 31 August).  However, this was only a view put forward based on the guidance available, and it seems that now (as was the case under the 3rd Treasury Direction) the only way to know for sure whether or not an employee inherited following a service provision change can be successfully furloughed and claimed for is to actually make a claim.

Update: return from maternity leave

We previously reported that government guidance stated employees would need to give at least 8 weeks’ notice of early return to work from maternity leave, and that employers would not be able to furlough them until the end of the 8 weeks. The position on this has changed following the latest iterations of the guidance for employers and employees, which confirms:

  • Employees need to give at least 8 weeks’ notice of their return to work, but employers can agree to shorter notice in certain circumstances.
  • Employers will not be able to furlough these employees until the end of the 8 weeks, or the date that they have agreed the employee can return to work.

We don’t know whether the particular “certain circumstances” referenced in the guidance (but not expanded upon) will have any impact on an employer’s eligibility for reimbursement and await further clarification.

We will keep an eye on all of the latest developments and update you accordingly. In the meantime, if you need any assistance with navigating the extended CJRS, please contact our employment team.

Claire Knowles – Partner

Mark Alaszewski – Associate

Rebecca Mahon – Solicitor

Adam McGlynn – Solicitor

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