The Government promised more information on the detail of the extended furlough scheme on 10th November. They did – but not until after most businesses had finished work for the day. There were some aspects that were as expected, but some mistakes and some things that employers need to be alert to – such as the possibility that from 1st December it may not cover those serving notice as a result of redundancy.
HMRC has issued the following summary information:
Employers will be able to apply for CJRS online from Wednesday 11th November – for periods from 1st November. You will need to submit any claims for November by 14th December.
• CJRS has been extended to 31 March 2021 for all parts of the UK. From 1 November, the UK Government will pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month. This will be reviewed in January.
• You and your employees do not need to have benefited from the scheme before to claim for periods from 1 November.
• HMRC intends to publish details of employers (comprising Limited Company and LLP names and registration numbers) who use the scheme for claim periods from December, and employees will be able to find out if their employer has claimed for them under the scheme. [This is for two reasons: firstly to discourage those businesses from using the scheme if they do not need to; and secondly to alert employees to the fact that their employer has claimed, so that reports of fraud (e.g. making a claim, but asking employees to continue working) can be made.]
• There are now monthly deadlines for claims. Claims for periods starting on/after 1st November must be submitted within 14 calendar days after the month they relate to, unless this falls on a weekend in which case the deadline is the next weekday.
• The Job Retention Bonus will no longer be paid in February 2021 and an alternative retention incentive will be put in place at the appropriate time.
• The launch of the Job Support Scheme has also been postponed.
The details are all contained in several document that were updated yesterday and can be found as a collection at https://www.gov.uk/government/collections/coronavirus-job-retention-scheme
Unfortunately, it isn’t that easy to extract the key points without reading them all, but the most important ones are:
Here are the headlines:
• Employers can claim for employees who were employed on 30 October 2020, as long as they have made a PAYE RTI submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee, unless they re-employed an employee after 23 September 2020.
• There is no maximum number of employees that employers can claim for and Employees returning from maternity leave must give the statutory eight weeks' notice to end maternity leave early in order to be furloughed (and get furlough pay, which will typically be higher than SMP).
• The employer must confirm in writing to the employee that they have been furloughed, and keep a written record for five years and employers can agree retrospectively to furlough someone with effect from 1 November 2020, as long as the agreement to retrospectively claim furlough occurs on or before 13 November (this only applies to retrospective agreements from 1st November – all others will have to be in place before an employee starts a period of furlough.)
However, the most worrying aspect is the sentence that says, "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." This means that if you're an employer thinking about dismissing someone (whether for redundancy or otherwise), be aware that any periods of notice served after 1st December may not be covered by the furlough grant.
It is not clear whether it may apply to notice given before 1st December that extends into December or indeed how they might review the percentages paid, but it will be a serious consideration for all businesses considering reducing staff numbers. Given the timing of the current advice and the pattern the Government has shown regarding when it makes its announcements, late November might indeed mean after business hours on Monday 30th November.
And finally, be nice to your payroll staff, they will have a lot of new information to absorb and apply!