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Can Christmas be furloughed?

If you normally close over Christmas, that closure is not due to Covid, interaction with furlough?

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As soon as new rules on November furlough came out had a client phone to ask if he could claim furlough for his Christmas break of 2 weeks. Never claimed furlough before, worked throughout and always takes a 2 week Christmas break, so just expecting state to fund his holiday. On my high horse, with no justification from guidance notes, I told him he could only claim if he was forced to shut for a longer period than normal due COVID such as lack of demand. However, I also deal with the payroll of a manufacturing company who have fully legitimate furlough claims as the market for their goods reduced sharply.  They too always shut down completely for a few days at Christmas but are likely to shut for longer than normal. Given holiday pay can be furloughed for 80% of pay what are your views? Just claim for days off over and above in a normal year? Claim for everything except Christmas Day when not legally allowed to work? It feels wrong to claim if you would have shut anyway but I suppose there is an argument that you would normally have put some money aside from that years trading to fund those wages.

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By Steven Dring
12th Nov 2020 11:01

We were having the same discussion in the office the other day.
Morally, I agree. The state shouldn't be funding the usual 2 week shut down for Christmas. However, if allowed, are we acting in the best interest of our clients?
I'll be interested to see what others think.

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By Wanderer
12th Nov 2020 11:05

You can't 'claim furlough'. If he wants to furlough his employees that between him and them.

Now as you are actually asking about claiming CJRS:-

From the ORIGINAL Treasury directive

Rishi wrote:

2.1 The purpose of CJRS is to provide for payments to be made to employers on a claim made in respect of them incurring costs of employment in respect of furloughed employees arising from the health, social and economic emergency in the United Kingdom resulting from coronavirus and coronavirus disease.

&
Rishi wrote:

2.5 No CJRS claim may be made in respect of an employee if it is abusive or is otherwise contrary to the exceptional purpose of CJRS.

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By Wanderer
12th Nov 2020 11:04

debrahuzzard wrote:

.... Christmas Day when not legally allowed to work?

Basis for that statement? Better tell all our nurses and police officers among others.
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Replying to Wanderer:
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By debrahuzzard
12th Nov 2020 12:18

Ok I was, thinking of large shops. but the reason most businesses close on Christmas Day is not due to COVID 19

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Replying to debrahuzzard:
RLI
By lionofludesch
12th Nov 2020 19:45

debrahuzzard wrote:

Ok I was, thinking of large shops. but the reason most businesses close on Christmas Day is not due to COVID 19

Surely you're thinking of Easter.

Interesting that you think that all businesses are shops, though.

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By OldParkAcct
12th Nov 2020 11:05

Aren't most people being furloughed for their holidays whenever possible?
Its not a question of whether its right or wrong as we are not there to make the moral judgements.
The government has been lax with any meaningful restrictions on much of the support given to businesses for furlough, Eat out to help out, VAT rate changes, loans, grants, etc principally because their main focus is to keep the economy running by releasing endless amounts of cash in the hope that people will spend it.
Judging by the results of my car dealerships over the past 4 months the consumers and businesses are using this to get a new vehicle.

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Replying to OldParkAcct:
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By Mr_awol
12th Nov 2020 12:20

No. As everyone knows (and as has even been posted in this very thread) there is a cover-all that if action is abusive of the scheme a claim is invalid.

Whether you can get away with it, is another matter - but i would hope for tough penalties for4 clients who take the [***]. In a perfect world, their crooked 'advisors' would be in for penalties too.

Where the difficulty arises is removing the moral view from the legal view and balancing clients best interests vs risk.

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Replying to Mr_awol:
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By OldParkAcct
12th Nov 2020 12:32

Unless we take the legally correct view then we are doing our clients a disservice. We are accountants not priests and our role is to arrange our clients affairs the manner that results in the optimum financial return for them as permitted by the legislation.

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Replying to OldParkAcct:
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By Mr_awol
12th Nov 2020 13:03

OldParkAcct wrote:

Unless we take the legally correct view then we are doing our clients a disservice. We are accountants not priests and our role is to arrange our clients affairs the manner that results in the optimum financial return for them as permitted by the legislation.

Indeed. Hence my comments that we need to separate the legal and moral position.

However, having done so, we cannot reverse that position just because it gives the client the 'optimum financial return'.

In short, as i have said to all of my clients, if you were going to furlough them anyway then there is nothign to stop you doing it whilst they are on (pre booked) holiday, or forcing them to take holiday (provided you give them adequate notice).

If , however, you are 'furloughing' them because they've booked a couple of weeks off, then you are abusing the system and do not have a valid claim.

I have also pointed out to them that many employers will be doing it, and most likely will get away with it. So far the minority who have tried this on have taken the view that it was a bit of a flyer, took the piss[***] anyway, and that no claim should be made for those circumstances.

I do have one large employer nearby with a very seasonal business that traditionally 'finds work' for staff in the quiet period. They have furloughed rather than do this (for most of the workforce) and justified it on the basis that whilst they would normally absorb the cost and find stuff to keep people busy, this year with much reduced profits they would have been forced to let some staff go instead. As such, whilst they are arguably furloughing a usual closedown and you'd ordinarily say no jobs were being 'saved' in fact, in these exceptional circumstances, a claim appears to be valid.

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Replying to Mr_awol:
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By Mr_awol
12th Nov 2020 13:04

And having typed my own views, it is confirmed by a poster below:

PandoraSleeps wrote:

Extract from guidance at:
https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-...

"Employees should not be placed on furlough for a period simply because they are on holiday for that period."

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By the_drookit_dug
12th Nov 2020 11:11

My take is that to only furlough employees over Christmas is taking the p1$$ and may rightly be seen as abusive.

However, if you are making genuine use of the scheme, and employees are being flexibly furloughed in December, it's difficult to argue that Christmas holidays aren't covered.

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Replying to the_drookit_dug:
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By Paul Crowley
12th Nov 2020 11:48

That is exactly my opinion
Somewhere is the mass of guidance
You cannot put on furlough just for holiday
Or something like it

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Replying to Paul Crowley:
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By debrahuzzard
12th Nov 2020 12:19

Thank you both, that was my gut feeling but wanted to see what other people think.

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Replying to the_drookit_dug:
A Putey FACA
By Arthur Putey
12th Nov 2020 13:02

Exactly. If you flex furlough someone the CJRS claim for a month is based on hours worked out of normal contracted hours for the month (which would be averaged over the year) and as the CJRS claim is calculated on a calendar days basis there is no way of excluding the public holidays and other non working days.

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By PandoraSleeps
12th Nov 2020 12:55

Extract from guidance at:
https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-...

"Employees should not be placed on furlough for a period simply because they are on holiday for that period."

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Replying to PandoraSleeps:
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By Paul Crowley
12th Nov 2020 16:27

Spot on
Much appreciated
I would say that includes shutdown for my staff 24th Dec to 1st Jan inc
And everybody else having the same style shutdown
Ethics and Morals just not part of the equation

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By zahzah
13th Nov 2020 10:10

If they've not used the scheme and have worked throughout then absolutely not.
However if they have been affected and are already making use of the scheme then they are fully entitled to ask employees to take holiday while on furlough as long as they are given twice the amount of notice as the amount of time to be taken and the pay is topped up to 100%

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Replying to zahzah:
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By Mr_awol
13th Nov 2020 10:35

zahzah wrote:

If they've not used the scheme and have worked throughout then absolutely not.
However if they have been affected and are already making use of the scheme then they are fully entitled to ask employees to take holiday while on furlough as long as they are given twice the amount of notice as the amount of time to be taken and the pay is topped up to 100%

There is never an issue in terms of the CJRS with asking employees to "take holiday whilst on furlough" (assuming , as you say, sufficient notice is given).

The problem is 'furloughing employees whilst they are on holiday' or furloughing during normal closures. The OP was, i believe, askign about the latter which is not ok.

Whilst the end result may be the same, the two scenarios are very different.

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By john mallon
13th Nov 2020 10:16

Debra, I agree with your last sentence. Indeed, under the furlough rules, holidays are to be paid at full rate and can be carried forward to next year and beyond but if the employees have be furloughed and, therefore, not working, how can the employer put aside the money to pay holidays in full. If the employee took holiday whilst on furlough, the furlough grant helped towards paying those holidays in full but paying owed holidays after being furloughed is a problem because no income for the employer was earned during furlough to pay for those accruing holiday. I think furlogh at Christmas is within the rules.

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Replying to john mallon:
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By Paul Crowley
13th Nov 2020 19:07

https://www.accountingweb.co.uk/tax/hmrc-policy/cjrs-your-questions-answ...

10. Debrahuzzard asks: Where the business closes for an extended break over Christmas can the staff by furloughed over that two-week break?
This is not in the spirit of the scheme. Employees should not be furloughed simply because they are going on holiday so the furlough period should begin before the holiday and continue afterwards in order to prove to HMRC that that is not the case.

This could be particularly important for businesses that close down for two weeks over Christmas. You cannot simply put everybody on furlough for two weeks and claim 80% of that money back as that is not what the scheme is intended for as it is very clear that you can only claim: “if you cannot maintain your workforce as your operations have been affected by coronavirus.”

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