It’s going to be here for a while – the Furlough Scheme has been extended to March 2021!
There have been more changes to the Furlough scheme (and it’s offspring, the Job Support Scheme) in the last two months than our team care to remember. On 6th November, Chancellor Rishi Sunak announced that the Coronavirus Job Support Scheme (CJRS) or Furlough scheme as it is more widely known, has been extended to the end of March. This hopefully gives employers a bit of stability and means that they can plan for the winter period with a little more certainty.
Effectively we have gone back to the way the scheme was in August. The government pays 80% of wages (up to £2,500 per month) and employers pick up the tab for national insurance and pension contributions.
More detail has been provided by HMRC, which we have distilled into an FAQ.
Can I furlough my employees?
If you cannot maintain your workforce because your operations have been affected by coronavirus (COVID-19), yes. You can furlough employees and then apply for a grant to cover a portion of their usual monthly wage costs. The guidance for employees refers to employers using the furlough scheme if “they are unable to operate or have no work for you to do because of coronavirus”.
Which employers is the scheme open to?
The scheme is available to all UK employers, including businesses, charities, recruitment agencies and public authorities, of any size and in any sector. All employers with a UK bank account and UK PAYE schemes can claim the grant.
What are HMRC doing to prevent abuse of the furlough scheme?
HMRC will publish details of employers who make claims under this scheme, starting from December 2020. HMRC are giving employers discretion on using the furlough scheme. It is expected that employers who have had staff on furlough since March will be under closer scrutiny. Tens of billions has been paid out already.
Do we need to have used the furlough scheme before 1 November?
No – the CJRS is open to all eligible employers. There is no need to have used the scheme previously. To be eligible for the extended scheme, employees must have been on the PAYE payroll on 30 October 2020. That means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made between 20 March 2020 and 30 October 2020.
We are considering redundancies. Can we still furlough the affected employees?
The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods. They will change the approach for claim periods starting on or after 1 December 2020. Further guidance will be published in late November. For instance, if you are considering redundancies, it looks like you won’t be able to do this after this month and still claim furlough.
We have employees currently on furlough. What happens to them?
The furlough scheme has been extended to March 2021. Employees can remain on full-time furlough until the scheme closes. However, you will need their written agreement to remain on furlough for this period if you do not already have it. In addition, you could also agree that employees who are currently on full time furlough can return to work part-time, and so remain on part-time furlough.
We furloughed some staff earlier in the year and they are now back at work. Can we re-furlough them?
Yes, you can re-furlough employees under the extended scheme.
What is the minimum furlough and claim period?
There is no minimum number of weeks or days that an employee must be on furlough. Any claim must cover a period of at least one week (unless you are claiming for the first few days or last few days in a month). Claim periods must start and end within the same calendar month.
What is the maximum number of staff we can claim the furlough grant for?
Between 1 July and 31 October, you couldn’t claim for more employees than the maximum number you have claimed for under any previous claim.
From 1 November onwards there is no maximum on the number of employees you can claim for under the scheme.
What can we claim under the extended CJRS?
Employers can claim 80% of employees’ usual wages, up to £2,500. The government say that the scheme will be reviewed in January 2021. Employers may be asked to contribute more from February onwards. Until 31 January, employers will only be required to contribute employers’ National insurance and pension contributions. The furlough scheme has been extended to March 2021, after which it is expected to close.
Can I rotate my staff on furlough if I do not have work for all of them?
It’s possible to rotate employees between full furlough and work. You can also bring some employees back permanently while others stay on furlough. You need to do this in a non-discriminatory way.
Can I furlough my staff over the Christmas holidays, claim 80% of the cost and then top up their wages as holiday pay?
No! You cannot put employees on furlough for a period just because your business is closed over the Christmas holidays.
What are the claim deadlines?
Claims from 1 November 2020 must be submitted by 11.59pm 14 calendar days after the month you’re claiming for. However, if this time falls on the weekend then claims should be submitted on the next working day.
Claim for furlough days in Claim must be submitted by
November 2020 14 December 2020
December 2020 14 January 2021
January 2021 15 February 2021
February 2021 15 March 2021
March 2021 14 April 2021
HMRC may accept a claim made after the relevant deadline if you had a reasonable excuse for failing to make a claim in time. You must have then claimed without delay after the excuse no longer applied.
Where can I find out more?
If you are a glutton for punishment, you can read chapter and verse about the CJRS here