08 June 2020 Julia Ascott, Employment Taxes Specialist
As you will have seen from my earlier article today, the Department for Business, Energy and Industrial Strategy (BEIS) published further guidance around the applicability of the Coronavirus Job Retention Scheme (CJRS) to research organisations, to include Higher Education Institutions (HEIs). This has been done to expedite decisions given that the scheme will be closing to new applicants at the end of the month and, as a result, the final date a new employee can be furloughed to be eligible for the scheme is 10 June (more details on timings and eligibility below).
Furloughing researchers
Where HEIs are involved in research, including those in receipt of public funding, the BEIS confirms that CJRS applies to:
In addition, the BEIS guidance confirms that a furloughed researcher can have their contract extended until the grant work is eventually completed.
Public funding
The BEIS guidance echoes the Department for Education’s (DfE) guidance for HEIs on research that is funded through a mixture of private and public income streams, which can be difficult to distinguish between. BEIS goes further, however, and confirms that where there is a mixture of commercial contracts, EU and UKRI grants and research has had to be paused, this will be eligible for CJRS.
If HEIs furlough research staff of a project that is supported by a public grant, HEIs will be required to notify the research funder (further details are awaited).
Finally, HEIs may be eligible for CJRS where they experience a loss of income from ceased/reduced research programmes because:
BUT the research staff being considered for furlough must also meet HMRC and DfE criteria. As a reminder, there are five conditions to be met under the DfE criteria:
Where there is a mixture of public and private funding for the first three conditions, HEIs must consider the guiding principle that they should not seek to furlough a higher proportion of their wage bill than could reasonably be considered to have been generated through commercial income.
The DfE guidance does consider circumstances where research work has been paused to be potentially eligible for the CJRS, but it mirrors the BEIS conditions above.
Our comments
It seems that the BEIS has taken the message of the DfE’s guidance and given more clarity to research organisations, albeit HEIs must still jump through a few more hoops than other organisations. Interestingly, BEIS doesn’t specifically mention the DfE’s ‘guiding principle’ but does ask that HEIs refer to DfE and HMRC guidance when considering eligibility.
BEIS have also confirmed that monitoring arrangements will be put into place to mitigate the risk of any ‘double dipping’. Whether that will be part of DfE’s monitoring or HMRC’s auditing (more likely the former), we shall see.
URGENT Next steps
Eligible employees must be furloughed for the minimum furlough period of 3 weeks from 30 June for aid to be received from the Government. From 1 July, CJRS is only applicable for existing furloughed staff. As a result, employees who have not yet been furloughed, perhaps because the HEI has been waiting for clarity on researchers, must be informed that they have been furloughed from 10 June. Given that working for the employer will negate a furlough claim, employees cannot have carried out any work on 10 June. Practically speaking, HEIs have until COP 9 June to inform employees who are still working (not already furloughed) that they have been furloughed from 10 June.
It is likely that considerations have already been undertaken at your HEI for relevant staff but decisions have been paused or changed because the guidance on researchers was not clear. If HEIs researchers are clearly eligible for the scheme and you have not yet placed them on furlough, this needs to be done by COP 9 June.
To furlough an employee, HEIs must confirm IN WRITING to their employee confirming that they have been furloughed – this written confirmation does include emails. HMRC guidance states that this must be “done in a way that is consistent with employment law, that consent is valid for the purposes of claiming through the scheme”.
For further information on the process of furlough, claims, etc, please refer to the BUFDG summary document. Any questions on the above, please email me.