Can the staff working in an NHS contracted pharmacy be furloughed?

01 May 2020

The NPA has had further correspondence with the Treasury in relation to furloughing.

Following on from our guidance dated the 23rd April 2020,  it was confirmed last week by the Treasury that furloughing can be allowed in the following circumstances:

  • For those staff in a business that are not working on NHS service delivery – for example this may include those in community pharmacy whose role is to sell cosmetics.
  • In circumstances where NHSE-I agrees to the closure of a pharmacy – for example in a closed shopping mall to which the public have no access and  if payments under the contractual framework cease, pharmacy team members, not needed to support other pharmacies that are open, could be furloughed.

GOV.UK advises that where employers continue to receive public funding for staff costs, that this funding is used to pay staff in the usual fashion – and correspondingly these staff should not be furloughed. This applies to both public and non-public sector employers who receive public funding for staff costs. In addition to the requirement for the furloughed employee’s role not to be publicly funded for which monies will not be reducing, the Treasury have also advised that any furlough payments claimed through the coronavirus job retention scheme (CJRS) must remain proportionate to the revenue disruption:

All claims to CJRS for furloughed staff should be proportionate to the impact on revenue disruption. If an organisation is fully funded for staff costs, and that funding continues uninterrupted, then staff should be paid in the usual manner. If staff costs are not fully funded by public grants, and their commercial income has been disrupted due to COVID-19, there are no options for redeployment, and the employee would otherwise be made redundant, furloughing may be appropriate, with all claims remaining proportionate to the impact on revenue disruption.”

The Treasury have also stated:

that only organisations that are not fully funded by public grants should consider accessing the CJRS’, in the following circumstances:

  1. The organisation has experienced a reduction in funding (in the form of commercial revenue or public grants) due to the associated economic disruption of COVID-19;
  2. The organisation has exhausted all reasonable options for redeployment across the public sector; and
  3. The employee considered for furloughing would otherwise be made redundant. “

The NPA understand that many pharmacies have experienced a reduction in income which is probably due to the reduction in professional services due to Government advice and keeping pharmacy staff safe. Although most pharmacies will have seen an increase in demand for prescriptions, advice and deliveries they have received very limited funding due to COVID-19. Pharmacy owners may also find it difficult to redeploy staff apart from management/admin type roles which would be limited in most pharmacy settings.

In relation to special categories of workers such as those who are shielded and vulnerable, further guidance is very limited due to the evolving policy and the below guidance has been received from the Treasury.

‘Where an employee needs to shield in a public sector organisation that is not fully funded by public grants, and working from home is not possible, furloughing may be appropriate. All CJRS claims should remain proportionate to the impact on revenue disruption, and those that need to shield should be furloughed before other staff.’

Unfortunately the guidance still remains unclear with differences in guidance between the Treasury Direction and that of which can be interpreted in different ways. Whilst the guidance is still unclear, if you feel you would like to claim furlough for your staff:

  1. Contact HMRC to get their advice.
  2. Speak to Ellis Whittam to ensure you understand the information currently available and review their resources plus FAQs.
  3. Ensure you complete the relevant paperwork for your staff.
  4. Follow the HMRC step by step guidance to make the claim.

Please note: HMRC retain the right to retrospectively audit all aspects of any claim and can request repayment of any monies paid out if they were found to be incorrectly claimed.

The GOV.UK guidance confirms that:

  • You can only claim for periods when your employee was on furlough
  • It is for you to decide the length of your claim period. In deciding what your claim period is, you should think about how frequently you run your payroll. The length of claim period will be different for different employers
  • You cannot make more than one claim during a claim period – this means you should include all of the employees that you want to furlough for that claim period, because you will not be able to make another claim for the same period or one that overlaps
  • You must claim for all employees in each period at one time – you cannot make changes to your claim. It is not possible to amend a claim once it is submitted. HMRC are looking to develop a process to allow for amendments to be made
  • You can make your claim in anticipation of an imminent payroll run, at the point you run your payroll or after you have run your payroll. Claims can be backdated from 1 March 2020 where employees have already been furloughed from that date. A claim cannot start any earlier than the date the employee was first furloughed
  • You must pay the full amount you are claiming to your employee. If you’re not able to do that, you’ll need to repay the money back to HMRC. The same applies in relation to employer NICs and pension contributions you claim regarding your employee. The full amount you claim in respect of these must be paid or you will need to repay the money back to HMRC

By making a claim, you agree that:

  • the grant you receive can only be used to pay your employee’s salary and the employer NICs and pension contributions you must pay in relation to the salary paid to your employee
  • you will return any grants back to HMRC immediately if you’re unwilling or unable to use it to pay your employee’s salary and the employer NICs and pension contributions

You must not make the claim if you do not accept that you can only use the money you claim for making those payments and that it must be returned to HMRC if you do not.

Please note: DHSC, NHSE-I and PSNC are in discussions about any additional support for extra staff costs and COVID-19 related expenditure in support of community pharmacy.