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Furlough scheme further extended to March 2021

The Chancellor has announced further details here, relating to the extension of the furlough scheme until 31 March 2021. An updated step by step guide for employers is available here.

Last updated: 16 November 2020

The extension is intended to provide certainty to employers so allowing a degree of planning for the future. The extended furlough scheme will operate in a similar way to the previous scheme. The government will pay 80% of wages up to a cap of £2,500 a month for the hours not worked, although this level of support will be reviewed in January. Flexible furlough will continue to be allowed as will full-time furlough. 

An employer can claim for employees who were on the employer’s PAYE payroll by 23:59 on 30 October 2020 and for whom a Real Time Information (RTI) submission was made to HMRC between 29 March 2020 and 30 October 2020. There will be no gap in eligibility for support between the previously announced end-date of the furlough scheme and this extension. For claim periods starting on or after 1 November 2020, employers can claim from 11 November 2020. 

Because of this extension, the Job Retention Bonus which was to have been paid in February will now not be paid. A retention incentive will be redeployed at the appropriate time.

What should employers do now?

  • Identify those employees who are to be furloughed and obtain their written agreement to the extension.
  • Those employees for whom redundancy consultation has commenced, consider whether, with an employee’s agreement, redundancy proceedings can be deferred and an employee placed on furlough. This is a complex area and you are advised to seek advice before proceeding.
  • Review the implications on your business of the extension to furlough. 

About the author

Doug Farrow

+44 (0)20 7556 1453
farrowd@buzzacott.co.uk

Last updated: 16 November 2020

The extension is intended to provide certainty to employers so allowing a degree of planning for the future. The extended furlough scheme will operate in a similar way to the previous scheme. The government will pay 80% of wages up to a cap of £2,500 a month for the hours not worked, although this level of support will be reviewed in January. Flexible furlough will continue to be allowed as will full-time furlough. 

An employer can claim for employees who were on the employer’s PAYE payroll by 23:59 on 30 October 2020 and for whom a Real Time Information (RTI) submission was made to HMRC between 29 March 2020 and 30 October 2020. There will be no gap in eligibility for support between the previously announced end-date of the furlough scheme and this extension. For claim periods starting on or after 1 November 2020, employers can claim from 11 November 2020. 

Because of this extension, the Job Retention Bonus which was to have been paid in February will now not be paid. A retention incentive will be redeployed at the appropriate time.

What should employers do now?

  • Identify those employees who are to be furloughed and obtain their written agreement to the extension.
  • Those employees for whom redundancy consultation has commenced, consider whether, with an employee’s agreement, redundancy proceedings can be deferred and an employee placed on furlough. This is a complex area and you are advised to seek advice before proceeding.
  • Review the implications on your business of the extension to furlough. 
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Speak to an expert

These are just some of the issues employers need to consider and we are talking to a number of businesses about challenges that have arisen as a result of COVID-19. If you have any queries related to HR matters in your organisation, please get in touch with our experts using the form below.

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