Furlough Scheme | all change from 1 November
Here’s the key points about the extended furlough scheme (CJRS):
From 1 November, you can add new employees who were not eligible under the scheme before November.
The earlier versions of the CJRS (which ended on 31st October) required an employee to have been employed and an RTI submission to have been made on or before 19 March 2020.
You can now include staff employed at 30 October 2020 provided an RTI submission has been made between 20 March 2020 and 30 October 2020 notifying at least one payment of earnings for that employee.
In other words, staff hired in late spring and summer are now eligible for furlough grants.
Employers should remember to change the terms of employment contracts (with each staff’s agreement) before furlough starts. This is very important as HMRC has threatened to start checking this; and in fact HMRC says that only contracts signed and dated up until 13 November 2020 can be relied on for the purposes of a CJRS claim.
What can employers claim for periods starting from 1 November 2020?
Scenario 1: Employee on fixed pay
The claim is based on 80% of the usual salary/wages in a reference period.
The reference period is the last pay period ending on or before 19 March 2020 for employees who:
- were on the payroll on 19 March 2020 (ie, there had been a payment of earnings in the tax year 6 April 2019 to 5 April 2020, reported on an RTI submission made on or before 19 March 2020), or
- for whom you have made a valid CJRS claim in a period ending on or before 31 October 2020.
- For all other employees, the reference period is the last pay period ending before 31 October 2020.
Scenario 2: Employee on variable pay
For an employee on variable pay, or variable hours, their ‘usual’ hours should be used.
Again, the claim is based on 80% of the usual salary/wages in a reference period.
For an employee:
- on the payroll on 19 March 2020 (ie, there had been a payment of earnings in the tax year 6 April 2019 to 5 April 2020, reported on an RTI submission made on or before 19 March 2020), or
- for whom you have made a valid CJRS claim in a period ending any time on or before 31 October 2020,
the usual wages are the higher of:
- wages in the corresponding calendar period (if relevant) in the tax year 2019 to 2020, and
- the average wages payable in the tax year 2019 to 2020.
- For all other employees, just use average wages payable between 6 April 2020 (or, if later, the date the employment started) and the day before they were furloughed after 31 October 2020.
Pension and NIC
You cannot claim for any pension or NIC paid by you for your employees.
How long will support remain at 80%?
CJRS has been extended to 31 March 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. But, the UK Government has said it will review the policy in January for claims for February and March.
HMRC has said it intends to publish details of employers who use the scheme for claim periods from December 2020 onwards. It will publish the employer name and also, where relevant, the company registration number, including for LLPs.
Employees will be able to find out if their employer has claimed for them under the scheme. It has not yet been confirmed how employees will be able to obtain this information.
There are now shorter deadlines for submitting monthly claims. Claims for periods starting on/after 1 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 week-day.
However, a claim once made can be increased provided it is amended within 28 calendar days of the end of the month it relates to (note that if you have over-claimed, this extension doesn’t apply).
Maximum number of employees
When CJRS V2 was introduced from 1 July 2020, the maximum number of employees which could be included in a claim was limited to the maximum number the employer had ever previously claimed for in any single claim made for periods before 30 June 2020.
For claims under CJRS V3 this limit no longer applies. This will be useful to businesses who have taken on additional staff since 1 July, who would otherwise not have been able to furlough all their staff, eg, those currently facing a new compulsory lock down of their entire business.
Some other bits to remember
- You can save and continue a claim within seven days of starting it.
- You can delete a claim within 72 hours of submitting it.
- Claim periods must start and end within the same calendar month.
- The claim period must usually be for a minimum period of seven days – the exception is for the first and last few days in a calendar month. However, flexible furlough agreements can last for any amount of time.
- Employees can take holiday while on furlough, but if flexibly furloughed, holiday hours count as furloughed hours rather than working hours.