Following the Government’s announcement that the furlough scheme would be extended on the 5th November until 31st March 2021, further guidance has now been published. The scheme is expected to be reviewed once again in January 2021.
Here’s an update on what we know so far:
- Employers can claim for employees who were employed on 30 October 2020 and on their PAYE RTI (Real Time Information) submission to HMRC between 20 March and 30 October 2020. An agreement must be in place to ‘lay-off’ a member of staff which can be done through a clause within the Contract of Employment.
- Furloughed employees continue to accrue leave as per their employment contract. The Government have also permitted that employees can carry forward a maximum of 20 days over into the next 2 calendar holiday years where it has not been reasonably practicable to take it. Employees can take holiday whilst on furlough and holidays must be at 100% of normal pay. Accrued leave can also be deferred and taken later in the year.
- No CJRS claims can be made for employees serving any part of their notice, leading to their departure, after the 1st
- Employers can claim even if they, or the relevant employees, had not previously used the scheme but employees had to be employed and on the employer’s PAYE payroll on 30th October 2020.
- Holidays can still be used while an employee is on furlough, without breaking the claim cycle. That said, using the furlough scheme to recover the grant during any seasonal closure, such as Diwali or Christmas, may well be frowned upon.
- Employees can be furloughed in a flexible arrangement, and employers will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.
- If an employee was made redundant from their job shortly before 1st November 2020 the ex-employee can ask you to re-hire them so that they can be furloughed. The employee must have been on the RTI Payroll on September 23, 2020. However, there is no obligation for you to take this step.