Breaking News – Furlough Scheme Extended Until March

In what will be very welcome news for many employers the Chancellor has announced that the furlough scheme will be extended until March. He has said that he has had to make “rapid adjustments” to the government’s economic plans as the spread of the virus has accelerated and that given the worse economic situation he believes it is right to ‘go further’.

It has been announced that:

  • The furlough scheme will be extended until the end of March for all parts of the UK.
  • For hours not worked, employers will only be asked to cover National Insurance and employer pension contributions, although this will be reviewed by the government in January to examine whether the economic circumstances are improving enough for employers to be asked to increase contributions.
  • Both full and flexible furlough are permitted under the extended furlough scheme.
  • Neither the employer nor the employee needs to have previously claimed or have been claimed for under the furlough scheme to be eligible under the extended scheme.
  • An employer can claim for employees who were employed and on their PAYE payroll on 30 October 2020. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
  • Employees that were employed and on the payroll on 23 September 2020 (the day before the Job Support Scheme announcement) who were made redundant or stopped working afterwards can be re-employed and claimed for. The employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.
  • HMRC will publish details of employers who make claims from December onwards under the extended scheme.

The government has also announced that they will not now be going ahead with the Job Retention Bonus. Instead it has been announced that they will ‘redeploy a retention incentive at the appropriate time’. The purpose of the Job Retention Bonus had been to encourage employers to keep employees in employment until the end of January, but with the further extension of the furlough scheme it was considered that the policy intent of the Job Retention Bonus has fallen away. The Job Support Scheme has also been postponed.

Further details of the extended furlough scheme will be published shortly and we will keep you updated on developments. If you are considering furloughing an employee, it’s important to seek advice on the facts of your situation before taking action.

If you have an employment law matter you would like assistance with, please do not hesitate to contact Kingfisher Professional Services Ltd.

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