Extended Furlough - Updates to the Coronavirus Job Retention Scheme (further updates made on 20 December 2020)
The CJRS, often referred to as the furlough scheme, was originally intended just to run to 31 May 2020. Various extensions followed but the scheme was finally due to close on 31 October and be replaced by the less generous Job Support Scheme.
However at the last minute, on 31 October, the CJRS was extended for the month of November. Then on 5 November it was extended even further, to 31 March 2021. By the time we get to March 2021 the CJRS will have been with us a for a year, an outcome that was unthinkable when it was first announced. [Update 20 December 2020 - the scheme will now run until 30 April 2021.]
There are now several pages on the gov.uk website devoted to CJRS, covering eligibility, the furlough process, calculating grants, working out standard hours for flexi furloughed staff, how and when to claim, and various other areas of the scheme. Most employers and employees will be familiar with the basics by now and many aspects haven't changed with this new release of the scheme so in this post we'll focus on the bits that have changed. To make things simple we'll occasionally refer to the rules up to 31 October as 'old scheme' and from 1 November as 'new scheme'.
From 1 November 2020 until 31 January 2021 employer support is back up to 80% of gross pay, up to a maximum monthly grant per employee of £2,500. This effectively mirrors the position from August (without the nice weather and Eat Out to Help Out!). Employees have always been guaranteed at least 80% of gross pay under the scheme so this increase from the 70% and 60% grants of the last 2 months is a welcome boost for employers, although they will still require to fund their share of National Insurance and pension contributions.
The situation will be reviewed during January and an announcement made then regarding the % support for February and March. [Update 20 December 2020 - the % support for February to April will remain at 80%.]
Back in March 2020 a line was drawn which prevented any employee who hadn't been included on a pay run by 19 March being included in the scheme. This cutoff has been moved to 30 October, so new employees taken on between March and October may now be eligible so long as they were included on a pay run by that date. Employees previously eligible will remain eligible but another key change here is that those pre-existing employees can now be furloughed even if they weren't furloughed previously (the old scheme had a 30 June cutoff for this). Employers who hadn't previously used the scheme can now use it as well. We've summarised these changes below.
- Old scheme (to 31 October) - only included if on a pay run by 19 March and furloughed for 3 weeks by 30 June
- New scheme (from 1 November) - include if on a pay run by 30 October
- The old scheme had a rule where employees laid off before 19 March could be re-employed and furloughed
- This has been amended so now any employee who was made redundant or left employment on or after 23 September can be re-employed and furloughed (so long as they had been on a pay run between 20 March and 23 September 2020)
- Old scheme - can only use it if at least one employee had been furloughed for 3 weeks by 30 June, and each claim was capped to the maximum number of employees included on a claim to 30 June
- New scheme - restrictions removed so additional employers can now use the scheme and there doesn't appear to be a cap on the numbers claimed for
The old scheme has only applied two initial claim deadlines, being 31 July for claims up to 30 June, and 30 November for claims up to 31 October. The new scheme has a deadline every month, on the 14th of the following month, or the next working day. The claim deadlines have been summarised below:
- Claims to 31 October - deadline 30 November
- Claims for November - deadline 14 December
- Claims for December - deadline 14 January
- Claims for January - deadline 15 February
- Claims for February - deadline 15 March
- Claims for March - deadline 14 April
- Claims for April - deadline 14 May [update added 20 December 2020]
There are strict time limits for amendments as well. Overclaims can be corrected on the next claim or paid direct to HMRC (a unique reference number is needed for this). Underclaims can only be corrected within 14 or 15 days from the above original claim deadlines, and must be made on HMRC's webchat or by calling 0800 024 1222.
Note that where someone is on flexible furlough the claims will usually be made later than when all employees are fully furloughed, as the flexi furlough claims need the precise hours of work to be disclosed and these might not be known until nearer the end of each month. The tighter deadlines will be more likely to affect such claims and care should be taken to allow enough time to prepare them in order to allow for unforeseen circumstances.
We have noted a number of other changes as follows:
- Given the short notice provided by these changes it is possible to retrospectively furlough an employee from 1 November but only until 13 November 2020; as with any furlough arrangements this is an employment law matter and we would suggest that appropriate legal advice is taken
- In a move to assist with whistle blowing, HMRC will be publishing the names of every employer that submits a claim for the month of December onwards (for companies and LLPs the official Companies House registration numbers will also be listed)
- As noted above the Job Support Scheme that was due to commence on 1 November has now been postponed until at least 1 April 2021
- The Job Retention Bonuses of £1,000 payable to employers for each furloughed employee still employed at 31 January (subject to various conditions) have now been deferred; official announcements state that "a retention incentive will be deployed at the appropriate time" so it's a case of waiting for an announcement on this one, probably not until some time in the new year
What hasn't changed (briefly!)
- Record keeping is still paramount, including agreements to put employees on furlough, communications during furlough, and claim workings - all must be kept for 6 years
- Flexible furlough is included in the new scheme in the same way as it has been since 1 July
- Furloughed workers must not carry out any duties for the employer while on furlough; they can however undertake job-related training, and there is a relaxation of these rules for company directors (see next entry)
- Company directors can be furloughed, providing the appropriate records are kept (usually board minutes) and their activities while on furlough are restricted (see our earlier news post on this subject here Directors and the CJRS)
- Furloughed workers can take annual leave (and with the appropriate notice can be directed to take annual leave by their employer) while on furlough; note that annual leave counts as non-working hours for flexible furlough and is therefore covered by the grant; however employees must be paid at their usual rate (not just 80%) while on annual leave
And finally ...
If you have any comments or need any advice relating to CJRS please let us know.
If we have been preparing claims for you up to and including October we will continue to contact you each month regarding ongoing claims. If we run your payroll and you haven't been claiming recently but are going to start using the scheme again please let us know and we will keep in touch regarding claims.