Important deadline – Extended Furlough Scheme

The Chancellor has extended the Coronavirus Job Retention Scheme (or furlough scheme) until 31st March and the government released full guidance on this extended scheme last night. The core principle of the scheme remains the same: from 1 November 2020 employers can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month. However many other rules are different.

There is an important deadline: employers can furlough employees retrospectively from 1st Nov and receive 80% of their wages as opposed to making them redundant, even if they have not previously been furloughed under the scheme, but the furlough agreement with them must be in place by this Friday, Nov 13th (the employer must confirm in writing to the employee that they have been furloughed, and keep a written record for five years).

You can find the updated rules here

Please note some important differences to the previous scheme:

  • Employees do not need to have been previously furloughed.
  • There is no maximum number of employees that employers can claim for (under the existing furlough scheme, employers could only claim for the number of employees they had claimed for previous to June).
  • Employers can still furlough employees for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked. Employers can continue to claim for periods ending on or before 31 October 2020 until the deadline on 30 November 2020. You might need to contribute towards the cost of your furloughed employees’ wages for these periods. For periods from 1 November 2020, you will only need to pay for the cost of employer NICs and pension costs.
  • If you made employees redundant, or they stopped working for you on or after 23 September 2020 you can re-employ them and put them on furlough. This applies as long as the employee was employed and on your PAYE payroll on or before 23 September 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made between 20 March and 23 September 2020.

Also important, please note that the government is reviewing whether “employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November.”  This means that it’s possible that employers will not be able to claim for employees who are working their notice from December onwards.

Employers should also note that the updated scheme rules state that “From December 2020, HMRC will publish employer names for companies and Limited Liability Partnerships (LLPs), the company registration number of those who have made claims under the scheme for the month of December onwards.”

For further advice and support on workforce planning during the COVID-19 pandemic, please contact us.