HMRC has come up with detailed guidance on the furlough scheme, the Coronavirus Job
Retention Scheme, which was declared by the Chancellor of the Exchequer last week.
- The furlough scheme has been extended until 31 March 2021.
- A review is planned for January on the extended CJRS, where the level of employer
contributions may be increased.
- According to this extension, the government will be responsible for the payment of
80% of employees’ usual salary, up to a maximum of £2,500 per month, for hours not
worked by employees until 31 January 2020. Employers will be responsible for
paying only pension and national insurance contributions.
- Neither the employee nor the employer needs to have previously used the CJRS to
access the extended scheme. Now, this is a substantial change to the original CJRS,
where the employee had to have been laid off for about three consecutive weeks to
enjoy continued access to the scheme.
- From 1 November, there is no limit to the number of employees a company can
- The new guidance also confirms that employers can furlough employees who cannot
work as they have caring responsibilities resulting from COVID-19, such as taking
care of their children, or are or at the highest risk of severe illness or clinically
- According to the original CJRS, a new employer can claim for employees of a former
business transferred if the PAYE or TUPE business succession rules apply. This was
applicable if the employee was employed by the former employer on or before 30
October 2020 and transferred to their existing employer on or before 1 September
2020. This could be an error and may refer to either “on or after 1 September” or a “1
Notably, while employers can continue to claim for laid-off employees serving a statutory
notice period, the ‘check which employees you can put on furlough’ guidance suggests that
the government is reviewing whether to include employees serving statutory or contractual
notice periods. The government will change the approach for claim periods starting 1
December 2020, and the guidance for the same will be published in late November. While it
is not conclusive, it appears that the government wants to discourage employers from
accessing the scheme for employees serving notice, presumably to prevent companies from
terminating employment or to use the scheme for subsiding notice payments.
The following written agreements to furlough are needed:
- All employers need to confirm in writing to the employee that they have been laid off
and keep this written record for five years.
- Employers can retrospectively lay off employees with effect from 1 November 2020.
However, the retrospective agreements should be entered into on or before 13