Christmas is just round the corner, which means many of us will be taking a well-deserved break. However, many businesses that are currently claiming employee wage subsidies via the extended Coronavirus Job Retention Scheme (CJRS) need to know how the Christmas furlough period works.
Christmas furlough and shutdowns
If your business is shutting down over Christmas, you need to pay particularly close attention to the furlough rules. Any shutdown that is not due to the coronavirus means you should not use the CJRS to cover workers’ wages. Updated HMRC guidance says:
You can only place employees on furlough if coronavirus (COVID-19) is affecting your operations.
You should not place employees on furlough just because:
- they are going to be on paid leave
- you usually do less business over the festive period
That said, if a worker’s furlough period begins before the Christmas shutdown and continues after it, then grants can be claimed for the holiday period. The leave taken by the employees will be treated as using up some of their statutory and contractual leave, although they will also be on furlough.
So what does this mean in practice? Essentially, you can claim the CJRS grant for 80% of a worker’s normal pay (capped at £2,500 per month). However, you also need to follow the regulations that require holiday pay to be paid at the rate specified in a worker’s employment contract. In other words, you need to top up wages to normal levels on days taken as holiday.
Christmas furlough and early payment of salaries
Some employers pay salaries early in December. If you do, be careful to report them correctly. You need to make sure that the ‘payment date’ in your RTI submission is the normal contractual payment date. So if you normally pay wages on the last Friday of the month (25th December), but intend to pay them a week earlier (18th December), the reported payment date must remain as 25th December.
A quick reminder about furlough claims timescales
If you are claiming furlough grants remember that CJRS must be claimed within 14 days of the end of a month.
HMRC to publish names of businesses using CJRS
HMRC has announced that it will publish information about employers who claim furlough payments on or after 1st December 2020.
The information will be posted on the Gov.uk website and will comprise:
- The employer name
- An indication of the value of the claim (within a banded range)
- The company number for companies and LLPs
HMRC will not publish this data if you can show that doing so would result in a serious risk of violence or intimidation towards certain relevant individuals, or people living with them. However, you must provide evidence such as a police incident number, documentary evidence of a threat or attack, or evidence of ‘possible disruption or targeting’.
Extra information for furloughed employees
Lastly, it’s worth noting that HMRC will soon be providing furloughed employees with extra information, including details of claims made for them on or after 1st December 2020. This information will be available via an employee’s personal tax account on Gov.uk.
As always, if you are a THP client and you would like any further advice about the furlough scheme, please get in touch. Your account manager will be very happy to help you.
About Samantha Rowe
Sam’s title is Operations Manager, but the title itself doesn’t truly convey the variety of what she does for THP. From administrative tasks to payroll, strategic business planning, and office systems and procedures, Sam’s primary skill lies in multitasking.
Sam’s journey began as an office junior with George Nottage (now merged with THP), and she soon learned skills in payroll and bookkeeping, and then gained experience as a PA to the Directors, and as Administration Manager.
At the moment, Auto Enrolment is an area that has a key focus for Sam, and for THP as a whole. “The question I’m asked the most by clients just now is, ‘How will auto enrolment affect me?’ And the answer is, no matter how big or small you are, you will absolutely be affected by the Auto Enrolment regulations. I’d encourage you to start thinking about it now, and to look at your payroll software to make sure you’re ready.”