Furlough Extension - What You Need To Know
The Government announced an extension to the Furlough scheme on 31 October 2020 for businesses impacted by the Coronavirus pandemic.
This follows the introduction of a second period of national lockdown commencing on 5 November 2020.
So what does it mean?
We've created a summary below of what businesses need to know about the extension:
The scheme will be extended until December 2020.
Employees will be eligible to receive up to 80% of their usual salary for the hours not worked, up to a maximum of £2,500 per month. This is more generous than the scheme had been in October and mirrors the level of grant available under the scheme back in August 2020.
The extended scheme is also more generous for employers than it was in October. With employers required to pay NI contributions and pension contributions for the hours not worked.
Employees can still be requested to work a proportion of their hours flexibly under the scheme or be placed on furlough full time.
Neither the employee nor employer needs to have used the scheme before.
Employers are still able to top up the employee’s salary payments above the scheme grant if they wish to do so
Work must not be conducted for the company during furloughed hours.
Which businesses are eligible?
Employers with a UK bank account and UK PAYE scheme.
Partially public funded organisations may be eligible where private revenue has been disrupted due to Covid-19.
Which employees are eligible?
Employees who were on the employers PAYE payroll by 23:59 on 30th October 2020 will be eligible.
Real time information payroll submissions notifying payment to HMRC for the employee in question must have been submitted on or before 30 October 2020.
All types of employment contract are eligible.
Employers will be required to obtain employee agreement to any furloughed hours or worked hours.
Furlough can be claimed for a minimum period of 7 consecutive calendar days.
Worked hours will need to be reported and the usual hours the employee would have worked during the claim period.
Employees will be paid by their employer for any worked hours and the employer will be required to pay tax and NICs due on these salary payments.
The Job Support Scheme (JSS)
The JSS was due to replace the Furlough scheme from 1 November 2020. However, the introduction of this scheme has now been postponed until the end of the extended furlough scheme in December 2020.
For further advice on the extended furlough scheme, contact us or book a call for a free initial discussion.