Under the current scheme rules employers do not need to have used the furlough scheme previously and employees do not need to have been furloughed in the past to be eligible for Furlough. However, there are some limitations to be aware of:

1. For any claims that you make for periods ending on or before 30th April 2021, you can only claim for employees who were employed on 30th October 2020 (as long as you have made a PAYE Real Time Information submission to HMRC between the 20th March 2020 and 30th October 2020 for that employee) 

2. From the 1st May 2021 onwards you can claim for employees who were employed on or after 2nd March 2021.

From 1st November 2020 the scheme rules were amended which means that there is currently no limit on the number of employees that can be placed on furlough. There is also no minimum timeframe that an employee must be on the furlough which means that an employee could be on Furlough for a week, a day or an hour at a time.

Until the end of June 2021 the government will contribute 80% of employees’ usual salaries for any hours not worked, up to a maximum of £2,500 per month. Employers will have to pay employer National Insurance and pension contributions. 

Then from 1st July 2021 the government contributions will reduce from 80% to 70% up to a cap of £2,187.50. Employers will continue to pay national insurance and pension contribution and importantly the employer will also have to pay 10% of wages to make up the 80% total up to a cap of £2,500.

Finally, from 1st August 2021 the government contribution will drop further to pay 60% of wages up to a cap of £1,875 with employers having to pay an additional 20% to top up the 80% total up to a cap of £2,500.

When the scheme closes on 30th September employers will then bear all of the employee costs and so if you haven’t already done so already now is the time to consider this and budget for additional costs where you currently have employees on furlough.

You must keep a record of letter that you sent employees confirming their period of Furlough and this written record must be kept for five years (this is because HMRC will be investigating claims once the scheme closes). If you need any help in putting the correct paperwork in place, please get in touch with us today.