UK COVID-19: updated HMRC guidance (30 April): TUPE coverage and other changes

HMRC has this afternoon published updated versions of its guidance on the Coronavirus Job Retention Scheme.

An important change is to eligibility for TUPE transferees. The updated guidance for employers on checking eligibility to claim now states that "a new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 28 February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership."

28 February was the date given in the original version of the guidance, until it was updated (on 15 April) to refer to 19 March.  That change meant that, where transfers took place before 19 March, transferees still had to comply with the requirement to have made an RTI submission for any furloughed employees on or before 19 March in order to be eligible for a furlough grant.  Transferees acquiring employees between 28 February and 19 March may have expected to be eligible, based on the earlier guidance, but found themselves unable to claim due to not making an RTI submission in time.  The reversion to the 28 February date will be welcome news for those transferees, although the terms of the Treasury's Direction will also need to be amended to give legal force to this change.

Two other helpful clarifications have been made:

1. There is a new provision stating that furloughed employees can undertake "union or non-union representative duties and activities for the purpose of an individual or collective representation of employees or other workers" without this counting as work for the employer (which is prohibited during furlough).  This is helpful given the possibility that employers may wish to start the information and consultation process for collective redundancies during furlough.  Although the amendment is not clearly covering the involvement of individual employees in electing non-union representatives, this ought also to be permitted.  Employers without existing representative bodies may wish to consider starting the election process while employees are on furlough now, to ensure they have representatives in place if and when needed.
2. The guidance now states that employers can extend a period of furlough by any amount of time whilst the employee remains in furlough.  This clarifies that there is no need to allow furlough to end and then re-start it, although in some cases extension might require further employee agreement and it would be prudent to get this in writing if feasible.  Obviously furlough can only be claimed for days up until the date the CJRS ends.

The amendments also include a new paragraph explaining how the rules apply to annually paid directors.

The main change to the guidance on how to work out 80% of employees' wages is to include further details on calculating NICs, and to make it clearer that, for variable pay employees, the employer must pay the highest of 80% of the same month's wages from the previous year or 80% of the average monthly wages for the 2019/2020 tax year (subject to the cap), rather than the choice being at the employer's discretion.  A minor change to the webpage on how to claim notes that employers with an employee without a NI number should contact HMRC.