Following this week’s latest guidance from HMRC there remains confusion surrounding the eligibility dates. Previously an employee only had to be on the payroll on the 28 February or the 19 March 2020.
However, the latest guidance states the employer must also have filed a Real Time Information (RTI) for the employee on or before that date. RTI is a means through which information about tax and other deductions under the PAYE system is transmitted to HMRC by the employer every time an employee is paid. Adding this requirement may have unintended consequences for employer’s eligibility to reclaim from HMRC.
If employees were put on payroll before the 28 February 2020 but their first pay was not processed until after the 19 March 2020, they will not be eligible for furlough.
Employees hired in March 2020 but for whom no RTI filing had been made by the 19 March 2020 will also not be covered.
Employees who had been made redundant but were then re-hired during March, will not be covered if they are paid after the 19 March 2020, as no RTI filing will have been made for them by the due date.
New directors whose payroll is processed annually may have an RTI submission falling after the 19 March and will also not be covered.
This contradicts earlier guidance and raises the questions of whether HMRC is entitled to shift the goalposts, after many employers have relied on the earlier guidance. Commentary suggests there may be a judicial review of this (a court case where someone challenges the lawfulness of a decision or action made by a public body).
We will keep you updated as further information emerges.