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Furlough Scheme Extended Again for Businesses

View profile for Susan Mayall
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Just when we reported that the furlough scheme was here to stay for another month, now the Chancellor has extended it until March 2021.  Employers were ready to shift to the Job Support Scheme (JSS) at the start of November but now have got an extension to the furlough scheme as they know it.

“Initially extended furlough was a pre-Christmas present from the Government, now the extension of the scheme means business can plan ahead and have some stability moving into 2021, ” said employment law specialist Susan Mayall.

 You may ask which version of the furlough scheme though?  

Which version of the furlough scheme is available?  

HM Treasury states that it will be the furlough scheme which was available in August 2020, meaning the government will pay 80% of a furloughed employee’s wages up to a monthly cap of £2,500.    

“The eligibility will be for flexible furlough, meaning that for unworked hours a furlough claim can be made, subject to payroll start dates. Employers can top up employee wages above the scheme grant at their own cost if they choose to.

"To be eligible to claim the extended CJRS they must have a furlough agreement with their employees with effect from 1st November (as  the previous furlough leave agreement would be detailed as finishing, at the latest on the 31st October ) .  A difference with this scheme is that the government may not pay the furlough grant for employees who have been given notice from 1st December.

“We will keep you updated of any further changes in this fast moving area and I am happy to answer any questions on this new area for all employers,” added Susan. 

Employers and the furlough scheme

  • All employers with a UK bank account and UK PAYE schemes can claim the grant. Neither the employer nor the employee needs to have previously used the CJRS.
  • The government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.
  • the furlough will be flexible if necessary.
  • employees who have previously been furloughed continue to have their reference pay and hours based on the existing furlough calculations (as under the old scheme). Employees who have not previously been furloughed will have a different pay/hours reference period. It would seem that the pay is based on 80% of the wages payable in the last pay period ending on or before 30 October 2020 (for those on fixed wages), or 80% of the average payable between the start date of their employment or 6 April 2020 (whichever is later) and the day before their CJRS extension furlough periods begins (for those on variable wages).
  • shielding employees can be furloughed.
  • those employees on the payroll on 23 September 2020 who were made redundant or stopped working for their employer after that date can be re-employed and a claim can be made for them.
  • employers must have confirmed in writing to their employee (or reached collective agreement with a trade union) that they have been furloughed. The employee does not have to provide a written response. 
  • the Job Support Scheme and the Job Retention Bonus are now postponed.

Flexible furlough or any furlough agreement made retrospectively and effective from 1 November 2020 is valid for a CJRS claim if it fulfils the criteria. Only retrospective agreements in place up to and including the 13 November 2020 may be relied on for the purposes of a CJRS claim.

Business Grants

Businesses required to close in England due to local or national restrictions will be eligible for the following:

  • For properties with a rateable value of £15k or under, grants to be £1,334 per month, or £667 per two weeks;
  • For properties with a rateable value of between £15k-£51k grants to be £2,000 per month, or £1,000 per two weeks;
  • For properties with a rateable value of £51k or over grants to be £3,000 per month, or £1,500 per two weeks.

The Chancellor also announced that the Government will pay 80% of average trading profits for the self-employed for the period November to January up to a maximum of £7,500.

For advice on all aspects of employment law call Susan and the team on 0161 785 3500 or email susan.mayall@pearsonlegal.co.uk

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.