Thread by @hselftax

Help please, #TaxTwitter and #LegalTwitter. Deeply technical question on Job Retention Scheme (JRS) and State Aid coming up.

Employers with NIC bills of less than £100,000 (ie most small companies) can claim Employment Allowance (EA) . This gives a £4000 reduction in their NIC bill

gov.uk/claim-employme…

From 6 April 2020, EA is classified as de minimis State Aid. There are limits on the amount of de minimis State Aid which can be claimed

gov.uk/guidance/chang…

Now, I’m fairly sure that JRS has been approved as State Aid under the EU Temporary Framework

ec.europa.eu/commission/pre…

So the question is:

Does the receipt of JRS have to be included in considering whether EA breaches de minimis State Aid limits?

(I told you it was a technical question)

Of course, for many employers the overall limit won’t be breached anyway (it is €200k for many industries). But for firms running payrolls for many clients, it’s a point that needs checking.

FWIW my tentative view (and I am not a lawyer, let alone a State Aid lawyer) is that JRS is specific State Aid so does not count towards the de minimis limits.

But I’d be very grateful if anyone could confirm. Thanks

@DanNeidle @seanjonesqc FYI

Dear @threadreaderapp please could you unroll?

Addendum (thanks @EmmaRTax and @agoodall4 ) the EU has confirmed the U.K. package falls under the Temporary Framework

ec.europa.eu/commission/pre…

Within this, JRS fits the category of “targeted support in the form of wage subsidies”

And as it is Notified State Aid, it should not count as de minimis State Aid and hence should not affect EA claims.

(This is a tentative conclusion and we will seek to confirm with HMRC via professional bodies @ICAEW_Tax and @CIOTNews ).

Thanks all.

Dear @threadreaderapp could you do an updated unroll please. Thank you.