HMRC issue second Treasury Direction for Coronavirus Job Retention Scheme (CJRS)

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On 22 May, the Chancellor published a second Treasury Direction (dated 20 May) made under sections 71 and 76 of the Coronavirus Act 2020 (the Second Direction), which will apply to claims made under the Coronavirus Job Retention Scheme (the CJRS) made after its publication, or to claims made previously that satisfy its terms.

The first Direction was issued on 15 April 2020 and provided the legal framework for the CJRS. Until 22 May, the terms of the CJRS consisted of the first Direction and HMRC online guidance which provided the eligibility requirements and operational terms under the scheme.

The publication of the Second Direction has addressed the remaining discrepancies between the first Direction and HMRC’s online guidance.

In summary, the Second Direction has provided the following:

  1. Employers do not need to make a payment to employees in advance of claiming reimbursement from the scheme, provided they intend to pay employees within a reasonable time of receipt;
  2. The date by which an employee must have transferred under TUPE in order to be eligible for furlough has been changed from 19 March 2020 to 28 February 2020, reflecting the amended date in HMRC's online guidance;
  3. Employers must put in place a written furlough agreement setting out the employee's terms and conditions, which is incorporated into their contract. A copy must also be retained until 30 June 2025;
  4. A period of unpaid leave may not be claimed for under the CJRS;
  5. In the event of the sickness of an employee, the furlough period cannot commence until immediately after the employee’s period of sickness and obligation to pay Statutory Sick Pay (SSP) has concluded.

The Second Direction refers to the CJRS expiring on 30 June 2020, despite the scheme having been already extended until 31 October 2020 and comments made by the Chancellor, Rishi Sunak, that the scheme will continue in its current form until the end of July. Further updates are awaited on this issue.

Due to the unprecedented nature of the Coronavirus pandemic, the guidance on how to adapt to its impact evolves daily and becomes out of date very quickly. We recommend that you keep checking to ensure you are following the most up to date guidance, particularly as there are still some unanswered questions about the CJRS. Further, in addition to the public guidance, there are always specific circumstances that individual employers must consider, such as a particular employee or employer arrangements or issues (contractual or otherwise). If in doubt, please take advice. You can reach us on 0161 941 4000 or via email at