Furlough scheme extended until 31 March 2021

The Chancellor has announced a further extension to the Coronavirus Job Retention Scheme (CJRS or “furlough scheme”) until 31 March 2021, less than one week after its previous extension through November.

While this decision will ultimately be welcomed by employers, it will undoubtedly frustrate those who have already made difficult workforce changes on the basis that the furlough scheme would end on 31 October 2020.

As before, the extended scheme will be available across the UK. This should allow the UK’s devolved governments greater discretion to extend or withdraw restrictions, with the reassurance that businesses can access substantial support for their wage costs. The “circuit breaker” restrictions in Northern Ireland are currently due to end on 13 November 2020 as planned.

While further details of the CJRS are awaited, we have summarised the key developments:

  • The stated intention of the extended scheme is to “support individuals and businesses who are impacted by disruption caused by coronavirus (COVID-19) this winter.”
  • Employees can still be fully or flexibly furloughed.
  • As with the original version of the scheme, employees will receive 80% of their usual wages, up to £2,500 per month, for hours not worked, and this cost will be covered by grant support. Employers remain responsible for employer pension contributions and NICs. The level of government support will be reviewed in January.
  • Employees should be paid as normal for any hours worked.
  • Employers can claim for those employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a RTI submission between the 20 March 2020 and 30 October 2020 to HMRC notifying a payment of earnings for that employee
  • Employees do not need to have been previously furloughed to be eligible.
  • Current guidance states, as before, that furlough should not be used to cover short term sickness absences. It can however be used where an employee is shielding, lives with someone who is shielding or has care responsibilities as a result of coronavirus, including childcare obligations.
  • Importantly, employees who have already been made redundant can be re-employed and claimed for under the CJRS, so long as they were employed and on payroll on 23 September 2020 and their employer has made a RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for them.
  • Employers must report and claim for minimum periods of 7 consecutive days. Claim periods must begin and end in the same calendar month and cannot overlap. There will be no gap in eligibility between the original end date on 31 October and the beginning of the extended scheme on 1 November. Claims can be made from 11 November 2020.
  • The Job Support Scheme and Job Retention Bonus have been placed on hold.

Further details on the extended scheme are expected on 10 November 2020.

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.