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Furlough Scheme Extension Announcement and Updates

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After weeks of public outcry asking for the Coronavirus Job Retention Scheme (CJRS) to be extended, Chancellor of the Exchequer Rishi Sunak announced on the 5th November 2020 that there would be a five-month extension of the CJRS. This announcement was made ahead of the nationwide “fire breaker” lockdown which came into effect at 12:01am on Thursday 5th November, and is likely to remain in place until Wednesday 2nd December at the earliest.

In his announcement, Mr Sunak stated that “It’s clear the economic effects are much longer lasting for businesses than the duration of any restrictions, which is why we have decided to go further with our support”.

How COVID is Affecting the UK

Despite local lockdowns across the country, including Liverpool, Greater Manchester, Lancashire, and Nottinghamshire, COVID-19 cases across the UK continue to rise. On the 31st October, Prime Minister Boris Johnson announced the second national lockdown for England. This action was something that the government tried to avoid, but is a necessary step to prevent the NHS from becoming overwhelmed once again.

On the 5th November 2020 pubs, restaurants, gyms and other shops and businesses deemed non-critical, were asked to close their doors for four weeks. However, there are differences to the second lockdown here in the UK, with educational institutions (including primary and secondary schools, colleges and universities) can remain open. It’s forecasted that after the 2nd December, restrictions will be eased and UK regions will revert back to the tiered, localised, Coronavirus alert levels.

With the UK government making last-minute changes with the UK lockdown, and in the interest of supporting businesses heavily impacted by the second lockdown, the Job Support Scheme (JSS) has now been delayed until the new furlough extension ends on the 31st March 2021.

What Furlough Support is Available in the UK Right Now?

The furlough extension scheme will operate in the same way at the first iteration from March. The government will pay 80% of an employee’s normal monthly salary, capped at £2,500. Employers remain responsible for the remaining National Insurance (NI) contributions, and pension contributions. In addition, the flexible furlough scheme will continue to be available for businesses in the UK where employees can work part-time and receive a furlough grant for those unworked hours.

The government has also broadened the eligibility of the furlough scheme, so employees must have been on the employer’s PAYE payroll before midnight on 30th October 2020.

Next Steps for Businesses

Employers can start claiming for the extended furlough scheme from 8am on Wednesday the 11th of November 2020. In order to claim, you’ll need:

  • To be registered with PAYE online
  • Your UK bank account number & sort code
  • Billing address of your bank account
  • Employer PAYE scheme reference number
  • The number of employees being furloughed
  • Each employees NI number & payroll number
  • The start and end date of the claim
  • The full amount that you’re claiming for
  • Your contact name & phone number

To find out what else is needed and to claim for the furlough scheme, see here.

Furlough Extension FAQs

We answer some of your most frequently asked questions surrounding furlough.

If I currently have employees on furlough, can they continue?

Yes, currently furloughed employees can continue to stay furloughed under the extended CJRS. You will still have to submit your claim for wages because of COVID-19 as you have been doing for furloughed employees to date.

The employer and employee will both have to agree to claim the furlough extension and any changes should be made clear on a collective agreement. View how this impacts employees in different situations, such as fixed-term contracts, tax credits, parental leave, apprenticeships any more here.

How does this impact recent redundancies?

As part of the revised furlough extension scheme, any employee that has been made redundant after the 23rd September can be rehired and put back on furlough.

What impact does this have on different UK legislatures?

As a result of devolved administrations, there are separate legislatures and executives in Scotland, Wales and Northern Ireland to allow for further democracy. The extended furlough announcements mean a total increase of at least £8.2 billion additional funding for the Scottish government, £5 billion for the Welsh government and £2.8 billion for the Northern Ireland Executive, on top of the Spring Budget 2020 funding.

Why has the UK extended flexible furlough?

In mid-March, lockdown measures saw the closure of non-critical businesses with figures from the Office for National Statistics (ONS) suggesting that 29% of firms had to temporarily cut staff to try and keep afloat. The CJRS was introduced to try and prevent mass redundancies. In July, it was announced that the furlough scheme would then move to a new, flexible, approach with the CJRS tapering to an end on the 31st October 2020.

With around two million people still utilising the furlough scheme in October, the government announced that the Job Support Scheme (JSS) would be set to launch on 1st November 2020.

Due to this unexpected change in coronavirus support, it’s likely that time and attendance software will play an important role to keep track of your overall records of your employees, ensuring you are compliant with the government requirements. Contact the team today for further information on how we can help.

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Mitrefinch needs the contact information you provide to us to contact you about our products and services. You may unsubscribe from these communications at any time. For information on how to unsubscribe, as well as our privacy practices and commitment to protecting your privacy, please review our Privacy Policy.

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Mitrefinch needs the contact information you provide to us to contact you about our products and services. You may unsubscribe from these communications at any time. For information on how to unsubscribe, as well as our privacy practices and commitment to protecting your privacy, please review our Privacy Policy.

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