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Last Friday the Government issued updated guidance to the Coronavirus Furlough Scheme.
The updates are as follows.
Flexible Furlough Scheme
- A new written agreement will have to be issued detailing what hours the employee will be working. If this agreement changes, a new agreement will need to be issued. Records of this agreement need to be kept on file for five years. You will need to keep a record of hours worked and hours furloughed. These records need to be kept for six years.
- You will be required to keep a record of the amount claimed through the scheme, your reference number and your calculation for HMRC audit purposes.
- If your employee were furloughed but is now back at work (on any hours), you would need to furlough them again for a further three weeks to access the FFS. However, after July 1st, 2020, this will not be required.
- All Coronavirus Job Retention Scheme and Flexible Furlough Scheme claims need to be for the same calendar month of claim. You can no longer cross months, and each claim must be for a minimum of 7 days.
- From July 1st 2020 the maximum number of employees that you can claim for is the maximum you have previously claimed for, for example, if you have previously claimed for 3, 5 & 10 between April and June from July, the maximum you can claim for would be 10.
New HMRC Powers
They also announced a raft of new powers that the HMRC will have to give them the ability to pursue;
- Fraudulent claims
- Incorrect information
- Employers who made workers work, despite claiming furlough
- Employers who didn't pass the payments on to staff
- Traded profitably and didn't need to but claimed CJRS payments
- 100% tax on payments made
- If businesses fail to repay, HMRC can prosecute
The burden of proof may be shifted onto employers to prove that they didn't break the rules after looking at the previous tax year and this tax year.
We hope that this gives you a good overview of the new rules and of course, it has been advised, there is a 30-day window for employers to repay anything claimed in error.