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Coronavirus Job Retention Scheme revised legislation published

22 May: Confirmation on what training furloughed employees can undertake and the eligibility of TUPE staff has been made in new legislation on the CJRS. The Tax Faculty outlines the changes.

On 22 May, the Chancellor made a further Treasury Direction, under Sections 71 and 76 of the Coronavirus Act 2020, to reflect extensions of the Coronavirus Job Retention Scheme (CJRS) that are needed to ensure the scheme works as the government intended.

The CJRS has evolved considerably from the basic outline first announced by the Chancellor in March 2020. For the scheme to deliver cash support to businesses quickly, it was inevitable that detailed guidance would need to be published ahead of the law which takes longer to write.

Among the changes, the new Direction makes it clear that the written agreement for the employee to cease all work has to be retained by the employer until at least 30 June 2025 and must:

  • specify the main terms and conditions,
  • be incorporated (expressly or impliedly) in the employee’s contract, and
  • is made or confirmed in writing.

The Direction also emphasises that the training activities a furloughed employee can undertake  must not provide a service to the employer, nor can they contribute to the business activities or generate income or profit for the employer. They must, however, be relevant to the employee's employment.

The other big change, which has already been explained in the guidance, relates to a payroll transferred as part of a business transfer (TUPE).

The new employer can claim a CJRS grant where an RTI submission has been made on, or before, 19 March 2020 for employees who were employed by the former employer in a qualifying PAYE scheme on 28 February 2020.