[2025] UKUT 00367 (TCC)

The FTT explained, without arguable error, in its Decision at [28]–[33] that the Applicant did not meet the qualifying condition for entitlement to CJRS payments set out in paragraph 5 to the Schedule to the First Direction:

“28.

Paragraph 3 of the Schedule to the First Direction specified the employers to which it applied: essentially any employer with a PAYE scheme registered on HMRC’s RTI system on 19 March 2020. It was common ground that CMC met this requirement.

29.

Paragraph 5 was headed “Qualifying costs”, and read:

“The costs of employment in respect of which an employer may make a claim for payment under CJRS are costs which –

(a)

relate to an employee –

(i)

to whom the employer made a payment of earnings in the tax year 2019-20 which is shown in a return under Schedule A1 to the PAYE Regulations that is made on or before a day that is a relevant CJRS day,

(ii)

in relation to whom the employer has not reported a date of cessation of employment on or before that date, and

(iii)

who is a furloughed employee (see paragraph 6), and

(b)

meets the relevant conditions in paragraphs 7.1 to 7.15 in relation to the furloughed employee.”

30.

Paragraph 13.1 defined “relevant CJRS day” as follows:

“For the purposes of CJRS –

(a)

a day is a relevant CJRS day if that day is –

(i)

28 February 2020, or

(ii)

19 March 2020.”

31.

It was also common ground that CMC satisfied paragraphs 5(a)(ii) and (iii) and 5(b). With regard to paragraph 5(a)(i), there was no dispute that CMC had not made a payment of earnings in the tax year 2019-20.

32.

HMRC’s position was that CMC was not entitled to CJRS because it had not made a payment of earnings in the tax year 2019-20 which was shown in an RTI return (being a “return under Schedule A1 to the PAYE Regulations”) which had been made on or before either of the

two relevant CJRS days.

33.

Although Mr Mahmood accepted that CMC did not meet the conditions in paragraph 5,

he relied on paragraph 8(1)…”

The FTT’s reasons at [8]-[14] of the PTA Decision explain that it made no arguable error of law in the Decision because paragraph 8 of the Schedule to the First Direction deals with the amount of payment but not the entitlement to the payment:

“8.

Mr Mahmood’s argument at the hearing was that the relevant provision was not paragraph 5 but paragraph 8(1). This was headed “Expenditure to be reimbursed” and read (his emphasis):

“Subject as follows, on a claim by an employer for a payment under CJRS, the payment may reimburse-

(a)

the gross amount of earnings paid or reasonably expected to be paid by the employer to an employee;

(b)

any employer national insurance contributions liable to be paid by the employer arising from the payment of the gross amount;

(c)

the amount allowable as a CJRS claimable pension contribution.”

9.

Mr Mahmood submitted that the words “reasonably expected to be paid” allowed CMC to make a claim for the amount of money which he reasonably expected to be paid on a monthly

basis, given his previous employment in that tax year by a different employer, Ocean Network

Express (Europe) Limited.

10.

The Tribunal dismissed that argument, on the basis that it is paragraph 5 which prescribes

gateway conditions for a CJRS claim to be made. The purpose of paragraph 8 is to set out the

amount of money to be reimbursed to those employers who have already met that gateway condition, as further explained at [36] of the Decision.

…

13.

Mr Mahmood has misunderstood the basis for the Tribunal’s decision. CMC’s appeal was dismissed not because the Tribunal took a different view from Mr Mahmood about what was meant by “reasonably expected”, but because the law is constructed so that:

(1)

The first step (paragraph 5) is to identify those employees of a given employer (here, CMC) who were paid a salary reported via RTI in 2019-20. This is the “gateway” condition for applying for CJRS.

(2)

It is only if an employer and an employee satisfies that gateway condition, that the employer can pay the earnings “reasonably expected to be paid” in accordance with paragraph 8(1).

14.

CMC and Mr Mahmood did not satisfy the gateway condition, and so CMC could not pay him under the CJRS scheme.”