COVID-19: update on the Coronavirus Job Retention Scheme (CJRS)

On 8 April 2020 HMRC gave evidence to the Treasury Committee and provided further information on the Coronavirus Job Retention Scheme (CJRS) and the Self-employed Income Protection Scheme. The CJRS online portal is due to open on 20 April 2020 and HMRC aims to pay employers within four to six working days after submission of their claim. Employers will then be able to claim 14 days before payments are due to employees. New operational guidance will be published shortly, to assist employers in getting their claims ready to upload when the online portal opens. HMRC's aim is for employers to use the online portal without assistance and it will therefore revise its existing guidance further if it receives feedback from stakeholders and employers that this is required.

There are currently no plans to extend the scheme to those employees who have had their working hours reduced because of the pandemic, or to assist those who started a new job after 28 February 2020 if their previous employer does not agree to re-engage and furlough them.

HMRC expects that by mid-May 2020 it will have identified and contacted all self-employed individuals who are eligible to claim under the Self-employed Income Protection Scheme and invited them to make a claim, which it estimates to be 3.8 million individuals. HMRC are committed to making payments under the scheme by early June 2020, but will do so earlier if possible.

Background

On 8 April 2020, Jim Harra, First Permanent Secretary and Chief Executive of HMRC, and Cerys McDonald, Director of COVID-19 policy at HMRC, gave evidence to the Treasury Committee on the actions HMRC has been taking to assist employers, employees and the self-employed in dealing with the impact of COVID-19.

Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme (CJRS) is due to open on 20 April 2020, in time for HMRC to make the first payments by 30 April 2020. It is HMRC's aim for employers to be paid the first furlough payments four to six working days after submission of their claim. Employers will not necessarily have to make a monthly claim and will be able to claim 14 days before they are due to pay their employees.

On 8 April 2020, HMRC started online testing of the new online portal with a small number of employers in order to test the usability of the online service and the supporting guidance, and to help it gauge the likely need for additional support for employers.

HMRC are expecting that most employers will attempt to put in their claim for reimbursement in the first couple of days after the scheme opens. However, the new online system has been stress-tested to deal with up to 450,000 claims an hour and HMRC are confident that it can deal with a large volume of claims. Additional HMRC staff will be redeployed to its helpline to assist employers.

Directors dividends cannot be used when calculating furlough pay. There is no way for HMRC to identify which dividends have been received in lieu of wages and it is not possible within the timescale for it to develop a system that assists directors who have previously taken most of their pay through dividends.

There are currently no plans to extend the scheme to those employees who have had their working hours reduced because of the pandemic, or to assist those who started a new job after 28 February 2020 if their previous employer does not agree to re-engage and furlough them.

The system cannot currently deal with payments in Euros. However, HMRC are identifying how many employers are likely to be affected and will determine how best to assist them.

Guidance

HMRC reported that it had seen a reduction in enquiries regarding the scheme since it published updated and expanded guidance on 4 April 2020. However, its aim is for employers to be able to "self-serve" and use the portal without assistance. HMRC will therefore revise the existing guidance further if it receives feedback from stakeholders and employers that this will be helpful. New operational guidance for employers will be published shortly, hopefully by the end of the week, which will assist them in getting their claims ready to upload once the online portal opens.

Prevention of fraud

HMRC will investigate claims after the event, will claw-back funds from employers where it determines erroneous payments were made, and will take action against those who have knowingly tried to defraud it. However, it considers that the following will assist in preventing fraud or abuse of the scheme:

  • The design of the scheme, including the requirement that an employee or PAYE worker be on their employer's payroll on 28 February 2020.
  • Only authenticated employers who have an existing PAYE system set up will be able to access the portal.
  • HMRC will run checks in the background to risk assess claims before payment is made.
  • There will be the ability to report suspected fraud of others.

Self-employed Income Protection Scheme

HMRC expects that by mid-May 2020 it will have identified and contacted all eligible self-employed individuals and invited them to make a claim. HMRC estimates that 3.8 million self-employed individuals will be potentially eligible to claim. HMRC are committed to making payments to the self-employed by early June, but will do so earlier if possible.

After identifying those who are potentially eligible, HMRC will need to calculate their entitlement. This is not yet possible in some cases because the deadline to file 2018-19 self-assessment returns was extended to 23 April 2020. HMRC will then contact those identified as potentially eligible to ask whether they wish to make a claim and, if so, to obtain their bank account details. To be eligible to claim, an individual's business must have been adversely affected by the pandemic. HMRC does not intend to check self-employed claims in advance and are relying on those affected to use the scheme responsibly.


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