The Treasury has issued a directive to HMRC which provides us with some very helpful clarifications.
The scheme has been extended to employees who were employed on or before 19 March 2020 provided that their employer has submitted real time payroll data by that date.
The scheme applies to employees who are furloughed “by reason of circumstances as a result of coronavirus or coronavirus disease”. This means that it does not just apply to employees that would have otherwise been made redundant.
Directors who are furloughed can only carry out their statutory duties to provide information about the Company e.g. file the company accounts or confirmation statement.
The previous guidance said that employers only had to notify the employee that they were being furloughed. However, the directive makes it clear that the employee has to have agreed in writing. This means that employees who have already been furloughed may not be caught by the scheme. Its important therefore that you obtain the employees consent in writing – email is sufficient.
The salary amount only includes regular salary or wages and so any performance related bonuses or discretionary payments and non-financial benefits cannot be included.
