Extended furlough guidance – a birthday cake full of surprises?

The Guidance for the extended Coronavirus Job Retention Scheme (CJRS) was released last night on 10 November 2020. We have been used to discrepancies and contradictions between announcements made about the furlough scheme and subsequent guidance issued but this time, following the issue of a policy paper on 5 November 2020 clarifying one or two points between the Chancellor’s announcement on 31 October and the guidance issued yesterday, we thought we knew what we were expecting or so we thought…

It is well known that from 1 November 2020 employers can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.

Employers can claim for employees who were employed on 30 October 2020, as long as they have made a PAYE RTI submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee, unless they re-employed an employee after 23 September 2020.

Surprise number 1 is the headline key change and one that is very unexpected. Employers can agree retrospectively to furlough someone with effect from 1 November 2020, as long as the agreement to retrospectively claim furlough occurs on or before 13 November. Excuse me? Yes that is right – you read that correctly. 13 November 2020 is this Friday! That does not give employers much time and opportunity to get their paperwork in order if they have plans to furlough retrospectively. If you need a detailed furlough agreement that does the job, contact me or another member of our employment and pensions team at Anthony Collins Solicitors.

Surprise number 2 is that there is a statement contained in the guidance to the effect that 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 1 December 2020, with further guidance published in late November. The important point to note is that if you are an employer thinking about dismissing someone (whether for redundancy or otherwise) and you want to furlough them, make sure you give them notice before 1 December.

Surprise number 3 is that there is no maximum number of employees that employers can claim for under the scheme. This is in contrast to the previous furlough scheme where employers could only claim for the number of employees they had claimed for previous to June.

Surprise number 4 is that employees returning from maternity leave need to give the statutory eight weeks’ notice to end maternity leave early in order to be furloughed and receive furlough pay, which is usually higher than Statutory Maternity Pay (SMP). However, it is interesting to note that the Guidance does not deal with the issue of the employee and employer who agree to shorten that eight week period. If employers and employees have previously agreed to shorten that period, please note that approach no longer appears consistent with the latest wording of the Guidance.

Surprise number 5 is from December 2020, HMRC will publish employer names for companies and Limited Liability Partnerships (LLPs), the company registration number of those who have made claims under the scheme for the month of December onwards. Why this is being done now when it has not been done before is not clear but it would appear to be a move towards transparency.

This information is correct at the time of writing (11th November 2010). We expect further guidance and treasury documentation in the coming months.

For more information

Please contact Katherine Sinclair if you require any further information.

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