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COVID Developments

Published 8 February 2021

NEW TREASURY DIRECTION

On 27 January 2021, the sixth Treasury Direction on the Coronavirus Job Retention Scheme (CJRS) was published. The Treasury Direction forms the legal basis for the CJRS. 

The new Treasury Direction does four things:

  • Formally extends the Scheme to 30 April 2021 (we already knew about this extension);
  • Extends the rules set out in the fifth Treasury Direction to cover the period from 1 February to 30 April;
  • Slightly modifies the method of calculating “usual hours” and “reference salary” for variable rate workers who are furloughed in March and April 2021. The changes are required to make the Scheme workable in March and April if the employer is using the “calendar look back” method. As the CJRS was introduced in March 2020, if employers referred back to the corresponding month in 2020 they may be including some time when employees were already on furlough and therefore would end up with an artificially low number for hours or salary. Instead, employers should use March/April 2019 as a more meaningful reference (or, as before, use the alternative method of using the average income for 2019-2020);
  • Extends the deadline for amending a claim from the 15th of the following month to the end of the following month.

The changes introduced by the Treasury Direction are now reflected in the most recent Government Guidance “Steps to take before calculating your claim using the Coronavirus Job Retention Scheme”.  

Authors

Hilary Larter

Hilary Larter

Leeds

+44 (0)113 251 4710

Ceri Fuller

Ceri Fuller

London - Walbrook

+44 (0)20 7894 6583

Zoë Wigan

Zoë Wigan

London - Walbrook

+44 (0)20 7894 6564

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