Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps an employee is able to take when their employer has asked them to loan the business part of their furlough payment.

Employers are required to pay staff all the Coronavirus Job Retention Scheme (CJRS) grant they receive from HMRC to cover 80% of wages up to £2,500 per month. The employer is still required to meet the employer’s National Insurance and pension contributions.

Employers cannot enter into any transaction with the worker which reduces the wages below the amount claimed. This includes any administration charge, fees or other costs in connection with the employment. Where an employee had authorised their employer to make deductions from their salary, these deductions can continue while the employee is furloughed provided that these deductions are not administration charges, fees or other costs in connection with the employment.

Whether to furlough an employee and claim CJRS support is a matter for the employer, and they will need to discuss and make any changes to their employee’s contract by agreement.

HMRC stand ready to support taxpayers in financial distress as a result of COVID-19, and urge any employers that may be struggling to pay their outstanding tax liabilities to contact HMRC as soon as possible.

HMRC will check claims. Payments may be withheld or need to be paid back if a claim is found to be fraudulent or based on incorrect information, or if payments are not being used as required by the scheme. Employees can report suspected fraud in relation to the CJRS on GOV.UK.