Extension of Furlough Scheme until March 2021
The Chancellor has just announced that in light of, “lockdown 2”, the Coronavirus Job Retention Scheme (CJRS of Furlough Scheme) will be extended and remain open until March 2021.
The terms of the CJRS will be reviewed in January 2021.
This means the Job Support Scheme will be postponed until the Furlough Scheme comes to an end.
The Furlough Scheme will be increased to the level that it was at in March 2020 and therefore more favourable than in October at the planned end of the scheme.
Employers will again be able to claim up to 80% (or £2,500) for each employee for the hours not worked. The employer is only responsible for covering tax, NI and pension contributions.
Employers can choose whether to use full furlough or flexi furlough.
Important points to note on extended furlough scheme:
- All employers with a UK bank account and UK PAYE scheme will be eligible. Publicly funded organisations are not able to use the scheme; however partially funded organisations may be able to;
- Employees must be on the PAYE payroll by 23.59 on 31st October 2020 and RTI submission made for that employee before 30th October 2020;
- Neither the employee nor the employer needs to have previously used the Furlough Scheme. You can put employees on furlough who have not previously been on furlough; and
- There will be no gap in eligibility for the furlough scheme between end of October and wage costs in November. There however may be a delay in payment.
In relation to employees you have the following options:
- Work from home where the job allows. This may still involve reaching an agreement over adapted duties, hours or pay
- Long or short term changes to terms i.e. reducing hours or pay;
- If the job cannot be done at home or the work is not there – place employees on furlough. This may be full furlough i.e. for all normal hours or flexi furlough. As before, you will need to agree this with your employees and follow up in writing so you have a record of the agreement;
- Consider whether redundancies will be necessary and start the process. Depending on the amount of redundancies, a collective process may become necessary. In any redundancy process and employer is required to consider all the options as to how to avoid redundancies; and
- In relation to employees who are clinically extremely vulnerable, these employees should not attend work. They must either work from home or be placed on SSP or furlough.
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