Updates to the furlough scheme

12 Nov 2020

Following the announcement of the extension of the furlough scheme to the end of March HMRC have published updated guidance on the scheme. While much remains broadly similar to the previous version of the scheme there are some notable changes – these are set out below.

  • As announced the scheme will cover 80% of an employee’s wages for hours not worked up to a maximum of £2,500 per month. The scheme will not however cover employers National Insurance Contributions or compulsory pension contributions which must be borne by the employer

  • The flexible furlough approach still applies – furloughed employees can work for any amount of time and any work pattern, with the scheme supporting their pay for their normal hours which are not worked

  • Employers can claim for employees who were employed on 30 October 2020, as long as they made a PAYE RTI submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.

  • The scheme can include employees who have not previously been furloughed – employers do not need to have previously claimed for an employee before the 30 October 2020 to claim for periods from 1 November 2020.

  • At the current time employers can continue to claim for a furloughed employee who is serving a statutory notice period, however grants cannot be used to substitute redundancy payments.

  • The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November.

  • If an employer made employees redundant, or they stopped working for them on or after 23 September 2020 you can re-employ them and put them on furlough. This applies as long as the employee was employed and on the PAYE payroll on or before 23 September 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made between 20 March and 23 September 2020.

  • The requirement to confirm in writing to employees that they are being furloughed remains with a written record of the agreement being retained for five years.

  • HMRC may check claims before they are paid, and will withhold payments if a claim is found to be fraudulent or based on incorrect information.

  • From December onwards details of all employers who have made claims under the scheme will be published

  • Claims for periods up to 31 October 2020 must be submitted by the end of November.

  • The government is intending to review the scheme as a whole in January.

WR Partners comment

Once again there are detail changes to the furlough scheme which employers need to understand an implement – and it apparent that these changes will not be the last.

HMRC have clearly learned from the experience of previous furlough claims and will be checking to ensure claims are valid before they are paid rather than trying to claw them back after the event.

The publication of the details of employers making claims is presumably intended to allow employees to check whether their employer has made a claim and potentially report them if they believe claims have been made fraudulently.

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