Furlough – It’s not over till it’s over

The headache for businesses trying to keep jobs afloat during the pandemic continues and, just as we were gearing up for the changes to be brought in by the new Job Support Scheme, along comes lockdown #2. With it, as you will have heard, comes the news of a further change to the support being offered by the Government – the return of the Furlough Scheme (otherwise known as the Coronavirus Job Retention Scheme), before it even went away. Saturday 31 October was due to be the date that the scheme finished, but instead of letting it wither on Halloween, the government blew new life into it, taking us back to a previous incarnation of slightly more generous support.  Here’s what you need to know:

What are the key provisions of the Scheme?

  • It ‘starts’ on 1 November 2020 and will continue for a month, unless extended
  • It covers 80% of employees’ wages for hours not worked up to a maximum of £2,500 – back to the level of support seen earlier in the scheme
  • Flexible furloughing will still be allowed, as well as full-time furloughing
  • A claim must be for a minimum period of 7 consecutive calendar days
  • Employers will pay employer NICs and pension contributions, and should continue to pay the employee for hours worked in the normal way
  • As with the current scheme, employers can still top up employee wages above the scheme grant at their own expense, if they wish
  • Neither the employer nor the employee needs to have previously used the scheme

Which employers can furlough their staff?

  • All employers with a UK bank account and UK PAYE schemes can claim the grant, even if they haven’t previously used the scheme
  • It is not expected that publicly funded organisations will use the scheme, but partially publicly funded organisations may be eligible where their private revenues have been adversely affected.

Which employees are eligible to be furloughed?

  • Employees must have been on their employer’s PAYE payroll by 23:59 30th October 2020 This means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made on or before 30th October 2020.

What about the new Job Support Scheme?

The Job Support Scheme, which was scheduled to come in to force on Sunday 1 November, has been postponed until the furlough scheme ends.

Does this apply to all of the UK?

Yes

What about employees who have been made redundant?

Although the government has not been explicit on this point yet, we believe that employers will be able to bring back employees they have made redundant provided they were on a RTI submission on or before 30 October.

Do I need my employees to sign another furlough agreement?   

It depends on the wording of your agreement.  If your agreement set an end date for furlough leave and did not set out an ability to subsequently place on further periods of furlough then you will need a new agreement.  As best practice we advise all employers to confirm furlough leave dates in writing, whether or not you need a new agreement.

Obviously this development is very recent and we expect further details to continue to emerge – we’ll keep you posted.

 

If you would like further advice tailored to your particular circumstances, please contact us.