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The extended furlough scheme rules are out!
Katy Cracknell • November 11, 2020
It's time to grab a coffee and get to grips with the extended furlough scheme rules........
After Rishi Sunaks announcement that the furlough scheme will be extended
until the 31st March 2021 the scheme rules have now been released. Some of the detail remains unchanged but there are some key changes that employers need to be aware of and we've summarised everything you need to know below:
- From 1st November you will be able to claim 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month. You must pay employers NI and pension contributions.
- Employers do not have to have used the scheme previously in order to claim but they must meet the eligibility criteria.
- You’ll be able to apply for the extended CJRS online from Wednesday 11th November, for any claim periods from 1st November.
- The claim period has now changed, and you must make any claims for November by 14th December, any claims for December by 14th January and so on (unless the 14th falls on a weekend in which case the deadline is the next weekday)
- The scheme will be reviewed in January 2021 so you should prepare for the government contribution levels to decrease at this time and your business contributions to increase.
- Employees must have been on your PAYE payroll on 30th October 2020 and you must have made a PAYE Real Time Information (RTI) submission to HMRC between 20th March 2020 and 30th October 2020, notifying a payment of earnings for that employee in order to be able to claim for them.
- There is no maximum number set so you claim for as many employees as needed.
- The new guidance does state that employees should not be placed on furlough for a period simply because they are on holiday for that period but that employees can still take holiday whilst on furlough……a little confusing but it’s clear that if you have an employee who is working full time in the business and then takes 2 weeks holiday you should not furlough them for this period and this will be considered a breach of the rules.
- The Job Retention Bonus scheme has been withdrawn and it is unclear if it will be re-introduced in April 2021. The Government have confirmed that an alternative retention incentive will be put in place at the appropriate time (but we don’t know any details of when or how much)
- For those employees that you have claimed for previously, the reference pay and usual hours will be calculated in the same way as they were under the original furlough scheme.
- For new employees who have not accessed the scheme previously, the reference pay and usual hours will be based on the last pay period before 30th October 2020 or, if they have variable hours, their average for the period between 6th April 2020 (or when they started their employment, if later) and 30th October 2020.
- You can re-hire employees that were employed and on the payroll on 23rd September 2020 who were made redundant or stopped working for you after this date. You must have made a PAYE Real Time Information (RTI) submission to HMRC from 20th March 2020 to 23rd September 2020, notifying a payment of earnings for those employees.
- You can continue to claim for employees while they are serving a statutory or contractual notice period, however grants cannot be used to substitute redundancy payments. Please note (and this is one of the biggest changes) 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 1st December 2020, with further guidance published in late November 2020.
- HMRC intends to publish details of employers who use the scheme for claim periods from December, and employees will be able to find out if their employer has claimed for them under the scheme. This appears to be a deliberate attempt to encourage the reporting of fraud.
For any specific advice and guidance please get in touch
with us today.
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