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Extension of furlough - a quick overview

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Extension of furlough - a quick overview

This is a summary of the key points to think about at this stage, that relate to the extension of furlough in addition to the original policy paper and in particular providing answers to common questions and any changes from the furlough guidance. 

We will be taking some time to digest the rest of the guidance and we update our own guidance and templates over the coming days.

You must keep an eye on the guidance and ensure you are referring to the current version at every stage. We anticipate the guidance will be updated and that a Treasury Directive will follow. For up to date information follow Birkett Long’s blog as well as on LinkedIn from Julie Temple and the team.

For those of you who want to read the guidance for yourselves the links are included at the end.

The basics: can you claim

  • The Coronavirus Job Retention Scheme (CJRS or furlough scheme) is extended from 31 October 2020 to 31 March 2021
  • 30 November 2020 is the last day employers can submit or change claims for periods ending on or before 31 October 2020
  • Extended furlough from 1 November 2020 remains open to all employers (with a UK bank account and UK PAYE scheme) who ‘cannot maintain [their] workforce because [their] operations have been affected by coronavirus (COVID-19)
  • You do not need to have made a claim under CJRS before
  • From 1 November 2020 you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month
  • You can claim for employees who were employed on 30 October 2020 and made a PAYE real time information (RTI) submission to HMRC between the 20 March 2020 and 30 October 2020 (for employees re-employed after 23 September 2020 please see below)
  • The scheme will be reviewed in January 2021
  • For claim periods starting on or after 1 November 2020 you can claim from 11 November 2020
  • There is no maximum number of employees you can claim for
  •  As previously, but importantly:
    • employers must discuss and agree changes to the employment contract by agreement and follow equality and discrimination laws. You must confirm in writing to the employee (or by collective agreement with a trade union) that they have been furloughed and:
      • make sure that the agreement is consistent with employment, equality and discrimination laws
      • keep a written record of the agreement for five years and
      • keep records of how many hours the employee works and the number of hours they are furloughed (i.e. not working)
    • the employee does not have to provide a written response
    • you do not need to place all employees on furlough
  • you can fully furlough (so an employee undertakes no work at all) or flexible furlough (so an employee works only part of their hours)
  • Agreements can be valid and made retrospectively to 1 November if they are in place up to and including the 13 November 2020
  • From December 2020, HMRC will publish names for companies and Limited Liability Partnerships (LLPs) and the company registration number of those who have made claims under the scheme for the month of December onwards.

The basics: which employees can you claim for

Where not covered above:

  • Fixed term contracts can be extended or renewed and the individual placed on furlough so long as they were employed as above. If the contract ended after 23 September, the individual can be re-employed and claimed for as long as the other relevant eligibility criteria are met
  • The government is reviewing whether employees serving contractual or statutory notice periods will be eligible under the CJRS and any change will start on or after 1 December 2020 (further guidance will be published in late November). 
    It seems likely, based on this, that the CJRS will move to prevent employers (and in turn employees) benefiting from the furlough scheme during notice periods. Regrettably, this is likely to discourage re-employment of those already made redundant (at least beyond 1 December) and/or encourage employers to consider further redundancies in the short-term.
  • Employees who stopped working for you on or after 23 September 2020 can be re-employed and put them on furlough as long as they were employed and on your PAYE payroll on or before 23 September 2020 (with an RTI submission made between 20 March and 23 September 2020)
  • Furlough can be used for clinically extremely vulnerable or highest risk of severe illness from Covid.

If you would like to speak with a member of our employment team or gain access to our up to date guidance and templates please contact us on 01268 244146 to discuss how we can support you and your business.

Useful links:

  1. Original policy which accompanied the announcement of the extension: https://www.gov.uk/government/publications/extension-to-the-coronavirus-job-retention-scheme/extension-of-the-coronavirus-job-retention-scheme
  2. Check if you can claim for your employees’ wages through the Coronavirus Job Retention Scheme https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme
  3. Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furlough-to-use-the-coronavirus-job-retention-scheme
  4. Other types of employees you can claim for https://www.gov.uk/government/publications/individuals-you-can-claim-for-who-are-not-employees
  5. Steps to take before calculating your claim using the Coronavirus Job Retention Scheme https://www.gov.uk/guidance/steps-to-take-before-calculating-your-claim-using-the-coronavirus-job-retention-scheme
  6. Calculate how much you can claim using the Coronavirus Job Retention Scheme https://www.gov.uk/guidance/calculate-how-much-you-can-claim-using-the-coronavirus-job-retention-scheme
  7. Claim for wages through the Coronavirus Job Retention Scheme https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme
  8. Reporting employees’ wages to HMRC when you’ve claimed through the Coronavirus Job Retention Scheme https://www.gov.uk/guidance/reporting-payments-in-paye-real-time-information-from-the-coronavirus-job-retention-scheme
  9. Examples of how to calculate your employees’ wages, National Insurance contributions and pension contributions https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages/examples-of-how-to-work-out-80-of-your-employees-wages-national-insurance-contributions-and-pension-contributions
  10. Full examples of how to calculate the amount you should claim for an employee who is flexibly furloughed https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages/example-of-a-full-calculation-for-an-employee-who-is-flexibly-furloughed
  11. Check if your employer can use the Coronavirus Job Retention Scheme https://www.gov.uk/guidance/check-if-you-could-be-covered-by-the-coronavirus-job-retention-scheme
  12. Pay Coronavirus Job Retention Scheme grants back https://www.gov.uk/guidance/pay-coronavirus-job-retention-scheme-grants-back
  13. Holiday entitlement and pay during coronavirus (Covid-19) https://www.gov.uk/guidance/holiday-entitlement-and-pay-during-coronavirus-covid-19 (not updated but relevant)
  14. Guidance on shielding and protecting people who are clinically extremely vulnerable from Covid-19 https://www.gov.uk/government/publications/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19/guidance-on-shielding-and-protecting-extremely-vulnerable-persons-from-covid-19

 

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