Covid 19 – Job Retention Scheme Update- 7th April 2020

Covid 19 - Job Retention Scheme Update- 7th April 2020

We highlight below two updates that HMRC have now issued in respect of the Job Retention Scheme

Company Directors

HMRC have updated their guidance to confirm that salaried company directors are eligible to be furloughed and that where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would reasonably be judged necessary for that purpose. They should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.

The amount that can be claimed for an employee whose pay varies

Where the employee has been employed for 12 months or more, you can claim the highest of either the:

  • same month’s earning from the previous year
  • average monthly earnings for the 2019-2020 tax year

If the employee has been employed for less than 12 months the amount is 80% of their average monthly earnings since they started work.

If the employee only started in February 2020, the amount is 80% of their pro-rated earnings so far.

HMRC have confirmed that the claim is for any regular payments you are obliged to pay your employees. HMRC have confirmed that regular earnings can include past overtime, fees and compulsory commission payments. However, discretionary bonus’s, tips, commission payments and non-cash payments should be excluded.

We will continue to keep you updated on any changes in respect of this scheme. If you have any queries then do please contact our Tax Manager James Andrews on j.andrews@bprheaton.co.uk or 07434 597790.