Updated Furlough Guidance
Following Chancellor Rishi Sunak’s announcement on 5th of November that the CJRS will be extended until 31st March 2021, HMRC has now published updated guidance on the extended Coronavirus Job Retention Scheme (CJRS).
The key points are as follows:
a. The existing scheme where the government pays 80% wages for hours not worked for furloughed employees continues until the 31st March 2021. This is subject to the maximum monthly cap of £2,500.00 and employers will only be responsible for covering the employer National Insurance and pension contributions for affected employees.
The basic requirements of qualifying for the newly extended CJRS are as follows:
- The extended scheme is open for employees who were employed on 30 October 2020, provided the employer has made a PAYE RTI submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee, unless an employee was re-employed after 23 September 2020.
- The extended scheme is also available for employees who were made redundant or stopped working on or after the 23rd September 2020 – provided that the relevant employees are rehired.
- Employers do not need to have previously claimed for an employee prior to 30th October 2020 in order to claim for periods from 1st of November 2020 onwards – i.e. the employee does not have to have been placed on furlough previously to be eligible to be placed on the Scheme.
- Employers may furlough employees for any amount of time or any work pattern whilst still being able to claim for the time not worked.
- Employers may continue to claim for periods ending on or before 31st October 2020 – although for periods up until the 31st of October the employer might need to contribute towards the cost of furloughed employees’ wages for this period.
- There is no cap on the number of employees that an employer can place on furlough from the 1st November 2020.
Employers must confirm in writing to the employee that they are to be placed on furlough and the employee must agree to the same. Employers need to keep a written record for five years.
Employees who are placed on furlough under the Scheme will keep all their working rights, including annual leave, parental leave, length of service etc.
The scheme will be reviewed in January 2021 to decide whether employers will be required to make a contribution after that.
Robert Maddocks, Associate
t: 0161 827 4604