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Legislation has been proposed to crack down on companies who have misused the government’s job retention scheme (JRS).
The consultation on the legislation closed on June 12 and it could enable HMRC to charge penalties of up to 100 per cent for incorrectly claimed support!
Companies who abused the scheme could see raises in income and corporation tasks to recover JRS or self-employed support grants to which the claimant was not entitled to, or where the grants were not used to pay furloughed workers.
Businesses had plenty of warnings at the start of the JRS scheme about misusing the scheme, and now it seems those that did could be faced with a big financial hit.
A portal has been introduced for overclaims to be dealt with as a deduction from the next claim, but unhelpfully HMRC won’t allow you to correct an underpayment in the same way, and a call to HMRC will be required.
It comes as the government published detailed guidance on how the furlough scheme will work from July 1 to October 31 2020 – after the Chancellor’s outline announcement at the start of the month.
From July, workers will be able to do part-time work, with government subsidies only applying to hours when the worker is not working during furlough.
It’s worth mentioning that there is no obligation to use this new ‘flexible furlough’ element and you can continue full furlough until October 31.
HMRC is basing their calculation on a combination of normal hours, the actual hours worked and a calendar day calculation basis – as opposed to a working day.
Issues will no doubt come up around working out an employee’s usual hours and the amount they should be paid for the part-time work as part of flexible furlough.
It can be difficult to understand, so we would recommend getting in touch with us for any advice on using flexible furlough.
It’s also been confirmed businesses won’t be able to claim for more employees than any claim already made on the scheme, which is likely to impact employers who have rotated employees on furlough.
As with the previous incarnation for the scheme, you must agree with workers any furlough arrangements and confirm in writing.
There will certainly be challenges with employee relations due to a lack of clarity on working patterns and pay – particularly in cases where the employer is not topping up furlough pay.
Get in touch with our team at Burgis & Bullock if you require expert guidance and advice on using the flexible furlough scheme.
Sean Farnell, Burgis & Bullock