In essence, the existing structure of the scheme remains in place with the Government contribution reverting to 80% of an eligible employee's reference pay, subject to a cap of £2,500. However, there are some changes and points to note that we highlight below. This article is based upon our understanding of the guidance as released on 11 November 2020.
30 November 2020 is the last day that employers can submit or change claims for periods ending on or before 31 October 2020 (before the extension). What can be claimed will depend on the rules in place at the relevant time.
It remains the case that employers must confirm to their employees (or reach a collective agreement with a trade union) in writing that they have been furloughed, or flexibly furloughed.
For flexible furlough or furlough arrangements that started on 1 November 2020, written confirmation can be put in place retrospectively. However, the deadline to put in place any retrospective confirmation is Friday 13 November 2020.
If you have existing written arrangements in place for the period up to 31 October, you will need to review them and determine how they need to be updated to claim under the extended scheme. If you are furloughing employees for the first time, then you will need to new written arrangements in place. This should be done in a way that is consistent with employment law.
You can claim for employees who were employed on 30 October 2020, as long as a PAYE real time information ('RTI') submission was made to HMRC between 20 March 2020 and 30 October 2020.
It is possible to re-employ and claim for employees who have been made redundant or stopped working for their employer, provided that this employee was still on the payroll on 23 September 2020.
If you are claiming for a period that ends on or before 31 October 2020, the number of employees that you can claim for in any single claim period from 1 July 2020 cannot exceed the maximum number you claimed for under any claim ending by 30 June 2020. For claims made from 1 November 2020, there is no maximum number of employees that you can claim for.
Employers can continue to claim for a furloughed employee who is serving a statutory notice period. As before, grants cannot be used to subsidise redundancy payments.
However, it is important to note that the Government is reviewing its position on this with any change to be introduced for periods of claim starting on or after 1 December. Further guidance is expected in late November. This uncertainty will need to be reflected in any redundancy letters where employees are being placed on furlough during their notice period.
As before, for employees who are made redundant, their base statutory redundancy pay and statutory notice pay must be based on their normal wage rather than the reduced furlough wage.
For employees who were employed on or before 19 March 2020, the method of calculating how much furlough can be claimed remains the same.
For employees who started their employment between 20 March and 30 October 2020, there are now new reference periods to be taken into account as follows:
The new guidance states that all employers who claim under the scheme from December onwards will have their name and company registration number published. Employers will need to consider whether they wish to have that information in the public domain.
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