Furlough scheme extended for further month

On Saturday evening, the Prime Minister unexpectedly announced the extension of the furlough scheme for another month, as England prepares to enter a national lockdown. The Coronavirus Job Retention Scheme had been expected to end on 31 October 2020. While this announcement was made alongside details of lockdown measures for England only, the extended furlough scheme applies across the UK.

The “circuit breaker” measures implemented in Northern Ireland are due to end on 13 November, before the conclusion of the extended scheme. Divergence between the UK’s devolved nations is likely to increase, and employers should monitor developments carefully. This latest change suggests that the situation in England may have a knock-on effect on the support available elsewhere in the UK.

We have summarised the key developments below.

  • The furlough scheme has been extended until December.
  • The level of support available will revert to the position in August, meaning that the government will cover 80% of wage costs, up to £2,500 per month per employee.
  • Employers must cover pension contributions and NICs.
  • Employees can still be “fully” or “flexibly” furloughed.
  • Employers can claim for employees who were on PAYE payroll by 23:59 on 30th October 2020 with a Real Time Information (RTI) submission notifying payment for that employee to HMRC made on or before 30th October 2020.
  • Further details are awaited on when employers can begin to make claims again. HMRC has reassured employers that there “will be no gap in eligibility for support between the previously announced end-date of CJRS and this extension”.
  • It is not currently clear whether employees who have been made redundant can be re-hired and claimed for under the extended scheme.
  • The commencement of the Job Support Scheme has been delayed until the conclusion of the furlough scheme.

The extended furlough scheme is more generous than the Job Support Scheme and will be welcome news for many, despite the lateness of its announcement. Many employers will have planned workforce changes for implementation on or immediately following the end of the furlough scheme and may now have to revise these plans and communicate urgently with affected employees.

Given the worsening of the “R” rate across the UK, this extension may be particularly welcomed by vulnerable or previously shielding employees who were reluctant to return to the workplace after furlough.

Please contact Jack jack.balmer@tughans.com or your usual Tughans contact, who can refer you to the employment team.

While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.