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Extension of Furlough Scheme

  • The new scheme is extended to 31st March 2021.
  • This is a flexible furlough scheme so some work is allowed. This is paid at normal rates and the balance of contracted time is paid by the CJRS.
  • The 80% benefit (up to a maximum of £2500 per month) will be in place until at least 31st January 2021 and may then decrease (I suspect to 70% and then 60% as we have in September and October) for February and March.
  • 30th November is the last date by which you can claim for pay periods ending on or before 31st October 2020.
  • You can claim for employees who were employed on 30th October, as long as HMRC were previously aware of them being on your payroll.
  • You do not need to have used the scheme previously to be able to claim from 1st November.
  • From 1st November, employers pay the Pension and NI for time on Furlough.
  • There is a fraud reporting line for the JRS. [From conversations with a couple of solicitors, they are beginning to see claims coming through based on whistleblowing of fraudulent claims].
  • Slightly different rules apply if an employee has been on statutory parental leave of any sort.
  • By placing someone on FL, you are making changes to their contract of employment, so it must be done in writing.
  • They employee does NOT need to provide a written response (We do not advise this. Our recommendation is that the change is accepted by the employee by them signing acceptance, but if they refuse the law CURRENTLY is not requiring their acceptance of the terms).
  • Proper records must be kept for 5 years.
  • You must continue to comply with all employment, equality and discrimination laws.
  • Employees MUST NOT do any work while they are furloughed and while you are claiming JRS for that period of time.
  • FL agreements can last for any amount of time until the end of the scheme, but you should specify the terms for clarification.
  • Claim periods work in blocks of 7 calendar days, but the leave itself can last for any period of time, or none at all, within this period.
  • While on FL, your employee can: do training, volunteer for another organisation, work for another organisation.
  • Employees continue to pay tax and pension on all monies they receive.
  • Employee rights continue i.e. SSP, annual leave (paid at 100%), parental rights, unfair dismissal, redundancy etc.
  • You can continue to claim for an employee serving statutory notice, but cannot claim for redundancy payments.
  • Annual leave continues to accrue in line with contract of employment. Employees can take holiday whilst on FL. If an employee is flexibly furloughed, holiday while they are not working is counted as furloughed hours rather than working hours. Holiday must be paid at the employee’s normal rate.
  • From December 2020 HMRC Will publish the names of companies (and LLPs) who are using the JRS.
  • If an employee is on a fixed term contract which has not expired by 1st November, it can be extended and you can put the employee on FL and claim under the JRS.
  • The Government are reviewing whether claims can be made for employees serving notice and have said they will change the approach for claims from 1st December. Guidance will be released later in November!!!
  • Notice pay and redundancy pay should be based on normal alary and not reduced salaries.

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