When you have asked lawyers about the extended Coronavirus Job Retention Scheme – the Furlough Scheme – you must forgive us if we could not answer all your questions. Although the extended scheme has been operating since 1 November 2020,...
When you have asked lawyers about the extended Coronavirus Job Retention Scheme – the Furlough Scheme – you must forgive us if we could not answer all your questions. Although the extended scheme has been operating since 1 November 2020, the Guidance was not actually issued by HMRC until 10 November, and there have been two further updates since then.
The information below is taken from the Coronavirus Act 2020 Functions of Her Majesty’s Revenue and Customs (Coronavirus Job Retention Scheme) Direction of 12 November 2020. This Direction will apply until 31 January 2021, although the Furlough Scheme continues to apply to 31 March 2021.
In the hope that there will be no further updates before this reaches our website, these are some key points:-
1.From 1 November 2020 employers can place employees on furlough and claim 80% of an employees’ salary for hours not worked up to a cap of £2,500. Employees can work part or their normal hours, and must be paid in full for the hours worked, and the employer only claims in respect of the normal hours not worked.
2.Employers are responsible for payment of employers NI contributions and pension contributions.
3.To be eligible, employees must have been on the employers PAYE RTI submission to HMRC between 20 March and 30 October 2020, and employed on 30 October 2020. However, former employees who have been re-employed after 23 September 2020 can also be included. Employees do not need to have been furloughed before.
4.The employer must confirm in writing to the employee they have been furloughed, and the employee should agree. Employers must keep a written record for five years.
5.Employers could have retrospectively furloughed an employee with effect from 1 November 2020, as long as the agreement was made before 13 November.
6.Previously, employers could claim furlough support in respect of employees on notice. This is now changing, with the change made on 13 November. The employer cannot claim furlough for employees serving a notice period in claim periods beginning on or after 1 December 2020 until 31 January 2021. This will mean that if you were claiming in respect of an employee on notice, for any part of the notice period occurring after 1 December to 31 January, you will not be able to claim furlough for that period.
7.If employees are TUPE transferred from one business to another, they will be eligible under the Furlough Scheme if they transferred on or after 1 September; were employed by either the old or new employer on 30 October; are on a PAYE RTI submission to HMRC by either employer between 20 March and 30 October 2020.
8.HMRC intend to publish the names of companies and limited liability partnerships who have claimed under the Furlough Scheme from December 2020 onwards.
9.In case you were thinking of claiming the Job Retention Bonus next year, that has now been scrapped, and the Job Support Scheme which was due to take effect on 1 November has been postponed.
In the 1960’s Harold Wilson said that a week is a long time in politics. I think the same can be said of the Furlough Scheme. Keep watching out for any further changes to the Scheme.