The UK government has published more guidance about the extended Coronavirus Job Retention (furlough) Scheme, which runs until 31 March 2021. We've updated our Letter putting a worker or employee on furlough leave, but here we'll summarise the key points.

  1. You don't need to have used the scheme before. The scheme is open to all UK businesses of any size (including charities) that have a UK bank account and are enrolled for PAYE.
  2. Staff don't need to have been furloughed before. You can furlough any of the following on any type of contract, provided they're paid via PAYE and were on your payroll as of 30 October 2020 (and an RTI payment submission was made to HMRC between 20 March 2020 and 30 October 2020):
  • Employees (including directors with service agreements and salaried members of LLPs)
  • Workers under a contract to provide services to you (provided you aren't their customer/client)
  • Agency workers (including those employed by an umbrella company)
  • Apprentices; and
  • Company directors (without a service agreement) and other officeholders, including salaried directors of their own personal service companies.
  1. You can rehire and furlough staff who have left. They just need to have been on payroll on 23 September 2020 (and an RTI submission was made to HMRC between 20 March 2020 and 30 October 2020). This includes staff who were made redundant or who left voluntarily. Similarly, you can re-employ and claim for someone on a fixed-term contract that expired after 23 September, provided they were on payroll on 23 September.
  2. You can furlough someone for some or all of the time. You can furlough staff full time, or pay them to work part-time and claim from the scheme for 80% of the hours not worked (known as flexible furloughing). There's also nothing stopping you from switching between the two, as long as you agree it with staff in writing.
  3. The government's contribution is fixed until at least the end of January.They'll pay 80% of wages up to a cap of £2,500. In respect of that 80%, you'll still have to pay the employer's minimum automatic enrolment pension contributions (unless the individual has chosen to opt-out or to stop saving into a workplace pension scheme), plus the employer's NICs. For flexible furloughing arrangements, the cap is proportional to the hours an individual is furloughed; e.g. if someone is furloughed for 60% of their usual hours, the cap is reduced to £1,500 (60% of £2,500). The government intends to review the contribution levels in January, which could result in you having to pay more from 1 February 2021.
  4. Paperwork must now be in place by the time you furlough someone.You can claim for someone who was on furlough leave between 1 and 12 November provided you have a written agreement with them (e.g. our Letter putting a worker or employee on furlough leave) signed by 13 November. From now on, however, the paperwork has to be in place by the time they go on furlough.
  5. You can only claim for someone you're making redundant until 1 December.For claim periods that start on or after then, you can't claim for any days during which they were serving a contractual or statutory notice period – this includes redundancy, resignation or retirement. Note that if someone begins notice on a day that's covered by a claim you've already submitted, you'll need to make a claim adjustment.

Note that if you make an employee redundant, you can't use grants to substitute redundancy payments and you must base statutory redundancy and statutory notice pay on their normal wage rather than the reduced furlough wage.

  1. Ending maternity leave early for furloughing requires 8 weeks' notice. If your employee wants to end their maternity leave early so they can be furloughed, they'll need to give you at least 8 weeks' notice of their return to work. You can't furlough them until the end of the 8 weeks, unless you agree that they can return early. If your employee is getting Maternity Allowance while they're on maternity leave, they'll need to stop those payments in order to get furlough pay.
  2. Staff can take annual leave while on furlough. While on annual leave, they must be paid their full normal rate of pay (or if their pay varies, their average pay in the previous 52 working weeks, or 12 working weeks for employers in Northern Ireland). This will include any contractual overtime, commission or fees. You'll have to top up the 80% grant by paying the additional 20% yourself. For flexibly furloughed staff, any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours.
  3. Claim calculations depend on when staff were eligible for the scheme.If they were eligible for the original scheme (i.e. up until 31 October), even if you didn't claim for them, then:
    • If their pay is fixed: use their actual salary before tax paid in the last salary period ending on or before 19 March 2020; or
    • If their pay varies: use the same monthly amount paid last year in the equivalent month(s), or average monthly earnings from the 2019-20 tax year. If you've employed them for less than 12 months, claim for an average of their monthly earnings since they started work.

If they were not eligible for the original scheme, then:

  • If their pay is fixed: use their actual salary before tax, paid in the last salary period ending on or before 30 October 2020; or
  • If their pay varies: claim the average monthly earnings from the start date of their employment or 6 April 2020 (whichever is later), up to and including the day before their furlough periods begins.

This is a very broad summary and you should read the full government guidance on the steps to take, calculating claims and calculation examples.

  1. There are claim deadlines. Claims relating to November 2020 must be made by 14 December 2020. Claims relating to each subsequent month should be submitted by the applicable claim deadline.
  2. Your details may be published.HMRC will publish details of employers who make claims under the extended CJRS scheme, starting from December. This includes the employer's name, the company registration number (for companies and LLPs) and 'an indication of the value of the clam'. HMRC have said they'll explain what's meant by that last point in late November. They've also said that they won't publish these details if you can show that it would result in a serious risk of violence or intimidation.