Extension to the Furlough scheme - Now extended to April 2021

Extension to the furlough scheme - Now extended to April 2021

As the Coronavirus crisis continues, the Government has announced a revised extension to the furlough scheme. Here is a summary guide.

The whole of England is about to go into a second lockdown, from November 5th until (at least) December 2nd. An uptick in the number of new Coronavirus cases led to the Government abandoning the regional ‘tiered’ approach and announcing a new national lockdown, while Wales, Scotland and Northern Ireland continue to implement their own variations of control measures.

In the new lockdown, ‘non-essential’ businesses such as pubs, restaurants, gyms and many shops have to close. Workers must return to working from home if they can (although many never stopped). The one significant difference between this new lockdown and the previous one is that schools and universities can remain open.

To ease the effect on businesses that have to close, or that see their demand drop because of the lockdown, the Government has extended the furlough scheme that operated during the first lockdown and beyond. It is hoped that extending the furlough scheme, rather than implementing planned revisions due to commence in November, will stop businesses having to resort to early redundancy.

The furlough extension

Companies that register their individual employees for the new furlough scheme can claim 80% of each employee’s wages, up to a cap of £2500. There is no requirement for companies to top up their staff member’s wages to the original amount, although they can if they wish.

Employers must still pay for employer NICs and minimum employer pension contributions based on the hours typically worked.

There is no requirement for employers to have made use of the furlough scheme in the past, or individual employees to have been furloughed before. All companies need is to be located in the UK, with a UK bank account and UK PAYE registration. Each employee must have been on the payroll at 23.59 on October 30th to be able to collect furlough payments. The scheme was open from November 1st and due to end on 31st March 2021.

Finally, companies can furlough their employees on a full-time basis or flexibly. Flexible furlough is when an employer reduces a staff member’s hours, pays them in full for the hours they work, then claims furlough for the hours they didn’t work against the hours they usually work.

How to claim furlough

There are no concrete details on how to claim yet, but it’s expected that it will be a similar process to the previous furlough schemes. If you did not make use of the previous furlough offers, there is an online portal where you register and claim.

One thing to remember is that companies must notify their employees of their decision to put them on furlough, and get an agreement in writing. This applies for full-time and flexible furlough. It’s also good practice to draw up a new agreement even if your employees were on the Open or Closed Job Support Scheme.

Find out more from Couchman Hanson

There is a lot of information to take in at the moment, and every business is different.

If you have any questions about Employment Law during the COVID-19 crisis, it’s time to talk to Couchman Hanson.

We are currently offering you a free, 30-minute call with a Couchman Hanson employment lawyer, where you can get all your questions answered. It’s peace of mind during these uncertain times.

To find out more, call 01428 722189 or email us at enquiries@couchmanhanson.co.uk