Furlough Salary Extension – Key details for employers

The chancellor has announced an extension to the Job Retention Scheme for the period from 1st November 2020 to 31st March 2021. This extension seeks to support employers who are unable to maintain their workforce because their operations have been affected by Coronavirus.

There are some changes in the extended scheme. Some of the key changes are outlined below.

  1. Eligibility
    • employees who were employed and their earnings were reported to HMRC within PAYE RTI submissions on or before 30th October 2020
    • All employers can claim this grant even if they have not claimed furlough salaries previously
  2. Claim Amount
    •  from 1st November 2020, employers can claim 80% of employees’ usual salary for hours not worked, maximum up to £2,500 per month
    • The employer has to contribute employer NI and employer pensions on furlough salary
  3. Usual working hours calculation
    • Employees contracted for a fixed number of hours – calculate their usual hours by looking at their contracted hours at the end of 
      • Last pay period on or before 19th March 2020
        • if there were on payroll on or before 19th March 2020
        • a claim has been made for them on or before 30th October 2020
      • Last pay period on or before 30th October 2020
    • Employees who work variable hours 
      • For employees working variable hours on or before 19th March 2020 or a valid claim has been made for them on or before 31st October 2020, you can use any of the following methods
        • the average number of hours worked in the tax year 2019 to 2020
        • the corresponding calendar period in the tax year 2019 to 2020
      • For all other employees working variable hours – calculate the average number of hours worked from 6th April 2020 up to the first furlough day on or after 1st November 2020
  4. From December 2020, HMRC will publish employer names for businesses who have made claims under the scheme for the month of December onwards
  5. Claims can be made up to 14 days prior to the end of the claim period end date

If you need help to apply for the extended furlough scheme, please get in touch with us.