by Richard Buckley, Editor, Business Eye

The UK Treasury needs to quickly provide more clarity around which businesses are able to access support under the Coronavirus Job Retention Scheme (CJRS), KPMG has said.   The local business advisory firm said ambiguity around what classifies as a business which is “severely affected by coronavirus” means that many companies in need of support are wary about claiming the wage cost grant.


 

Chancellor Rishi Sunak announced the CJRS last week as part of a host of measures aimed at protecting business from the economic impact of the movement restrictions put in place to slow down the spread of coronavirus. The Treasury said it is a temporary scheme, for at least three months starting from 1 March 2020.

 

Following a webinar held yesterday (Thursday) Eunan Ferguson, Director, Employment Taxes at KPMG in Northern Ireland, said: “The Coronavirus Job Retention Scheme (CJRS) is remarkedly generous and rightly hailed as a lifeline by many struggling businesses. However, it was pretty clear from the number of queries submitted during the webinar that further clarity is required as soon as possible in relation to the precise circumstances employers can furlough workers and access support under the scheme”.

 

“Current guidance states businesses must be “severely affected by coronavirus” to claim the wage cost grant and concern over how restrictively this condition should be interpreted may prevent many businesses, that are otherwise having to make difficult decisions around cutting payroll costs, from applying for the relief”.

 

He said those companies forced to close by the pandemic and subsequent lockdown will clearly be classified as severely impacted but for others the test is more subjective.

 

“Pending release of further guidance, we recommend employers that wish to access the CJRS should approach the application process only after careful consideration whether their business will qualify and retain sufficient contemporary evidence supporting any decision they have taken regarding the appropriateness of their claim, recognising these applications may be subject to a subsequent HMRC audit at some point in the future.

 

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KPMG NI's Eunan Ferguson

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