Government’s Furlough Scheme Extended Again

Government’s Furlough Scheme Extended Again

The furlough scheme which was due to end on 31 October 2020 then further extended to 2 December 2020, has now been extended further to 31 March 2021. It will says the Chancellor be reviewed again in January 2021.

The details:

The government will pay 80% of wages (subject to a cap of £2,500 per month) for employees’ hours not worked.

Employers have to cover National Insurance and employer pension contributions for all contracted hours whether they are worked or not.

However, there is no requirement for employers to contribute to a furlough employee’s wages for hours not worked, although they can do so if they wish.

Businesses have the flexibility to ask furloughed staff to work any of the contracted hours that are required, according to their needs.

There is  no change in the process of making a claim under the furlough scheme which  will work in the same way as previously, i.e. claiming either shortly before, during or after running payroll.

The scheme is open to employees who have not been furloughed previously and employers can utilise it even if they have not done so before.

Employers can claim for employees on their PAYE payroll on 30 October 2020. The employer must, however, have made a PAYE Real Time Information submission to HMRC between 20 March and 30 October 2020 notifying a payment of earnings for that employee.

Employees who were  made redundant or who stopped working after 23 September 2020 can be rehired and furloughed. As above, the employer must have made a PAYE Real Time Information submission to HMRC between 20 March 2020 and 30 October 2020 notifying a payment of earnings for that employee.

The Job Retention Bonus of £1,000 has been scrapped. The government has said that it will ‘redeploy a retention incentive at the appropriate time’. (The Job Retention Bonus was going to provide a one-off £1,000 grant to employers for each previously furloughed employee kept in viable employment until at least 31 January 2021).

The Job Support Scheme is on hold and furlough has replaced it.

Further details may be announced later and we will keep you informed.

The Graham Agency