The government has published further guidance regarding the extended furlough scheme today (11th November 2020). The basic workings of The Coronavirus Job Retention Scheme have not changed – the scheme will remain open until 31 March 2021. From 1 November 2020 you can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.
As an employer, do I need to continue to pay my furloughed employees NICs & Pensions Contributions?
Yes, the employer will need to continue to pay National Insurance and pension contributions for employees that are on the scheme.
The government will review the scheme in January and may choose to lower the amount of the employee’s salary covered from 80%. The employer can continue to flexi furlough employees.
Can I claim furlough if never previously furloughed?
You can claim for employees not previously furloughed provided they were on an RTI payroll submission by 30th October 2020. All employees who were not previously on furlough must sign an agreement confirming they have agreed to go on furlough. If employers are not choosing to top up salary to 100% then the employee must also sign an agreement confirming that they are happy to have their pay reduced to 80%.
Employees you have made redundant can be re-employed and then furloughed
If you made employees redundant, or they stopped working for you on or after 23 September 2020 you can re-employ them and put them on furlough. This applies if the employee was employed and on your PAYE payroll on or before 23 September 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made between 20 March and 23 September 2020.
Apprentices and furlough
Apprentices can be furloughed in the same way as other employees and they can continue to train whilst on furlough.
However, Apprentices must be paid at least the Apprenticeship Minimum Wage/National Living Wage/National Minimum Wage as appropriate for all the time they spend training. This means that for time spent training you must cover any shortfall between the amount you can claim for their wages through this scheme and their appropriate minimum wage.
Using the scheme whilst making employees redundant
Where an employer makes redundancies, this should be done in accordance with the normal rules. This includes giving a notice period and consulting staff before a final decision is reached. You can continue to claim for a furloughed employee who is serving a statutory notice period, however grants cannot be used to substitute redundancy payments.
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 1st December 2020, with further guidance to be published in late November. As soon as we have further guidance will provide an update on this matter
If you make an employee redundant, you should base statutory redundancy and statutory notice pay on their normal wage rather than the reduced furlough wage.
If an employee’s health has been affected by coronavirus (COVID-19) or any other conditions
If your employee is:
- unable to work because they are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance
- unable to work because they have caring responsibilities resulting from coronavirus (COVID-19), including employees that need to look after children
They are eligible for the grant and can be furloughed.
If your employee is on sick leave or self-isolating because of coronavirus, they may be able to get Statutory Sick Pay (SSP). The Coronavirus Job Retention Scheme is not intended for short-term absences from work due to sickness.
Publishing names of employers using the scheme
HMRC will be publishing the names of Companies and LLP’s who use the furlough scheme from December 2020 onwards, this is to try and reduce fraudulent claims ie it will identify companies who say they have staff furloughed but are continuing to work
We hope this information helps you and we are here for you during this difficult time. We will continue to keep you updated as the Government releases new information. Our business contingency plan is in place and we will do everything we can to support our clients during this uncertain period, please do not hesitate to contact us here if you have any concerns or queries.
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The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors or omission or for any person acting on or refraining from acting on the information provided in the above