Extension to Furlough: the Key Facts
12 November 2020
On 31 October 2020, the Prime Minister announced that the Coronavirus Job Retention Scheme would be extended for a further month, just hours before it was due to expire. This was followed shortly by the Chancellor's announcement on 5 November 2020 that the scheme would be extended until 3 March 2021.
The terms remain largely the same as when the scheme was extended for a month, and are available to review in our previous article or on the government's guidance and factsheet. The Chancellor has not yet announced any tapering of the grants up until March, although he has stated that the scheme will be reviewed in January 2021 to assess whether this is necessary.
There are some areas in with the current scheme differ from the scheme that ran from July until October, as follows:
- Employers can retrospectively furlough an employee from 1 November 2020, as long as an agreement is reached with the employee by this Friday 13 November.
- Employers can put employees on furlough who have not previously been furloughed.
- The government has stated that they are reviewing whether employers are able to claim a grant for employees who serving out their notice period and will change their approach for claim periods starting on or after 1 December. Employers who are currently considering dismissing furloughed staff should therefore ensure that they give notice to terminate before December to ensure that they can claim the grant for the notice period.
- In an apparent bid to increase transparency, HMRC have also said that they will publish the names of all companies and Limited Liability Partnerships who claim under the CJRS from December 2020 onwards.
The Job Retention Bonus, which was due to be paid out to employers who brought back employees from furlough and kept them on until the end of January, is of course redundant in its current terms, and has been put on hold. Rishi Sunak has stated that this will be replaced with a further incentive in due course, although no details have been provided as yet. Likewise, the Job Support Scheme has been deferred indefinitely.
It is also worth noting that, since the government's original announcement of a one month extension on 31 October, it has also announced that employees who were on the payroll as at 23 September 2020 and were then made redundant or stopped working for the employer may be rehired and furloughed.
The following guidance has been updated in line with the new extension:
If you would like more information or advice on your business' position in light of the government's announcement, please contact our Employment Team or your usual Wilsons contact.