Furlough Extended… Again!

Updated 11/11/2020

Now, you may well be feeling a sense of déjà vu reading that headline (this blog’s writer certainly is!) as it was just over a day ago that we wrote about the furlough extension until December that had been announced by the Prime Minister as part of the new lockdown measures. But, it was announced today by Chancellor Rishi Sunak in his Economy Statement that furlough would now be extended not just until December, but all the way through to the end of March 2021.

So… let’s go through what we know.

How much will the government contribute?

This 80% will be calculated based on either the last pay date before 19th March 2020 (if the employee was on the payroll at that date, or have been previously furloughed), or the last pay date before 30th October2020 (for any other employees).

Who can use the scheme, and is it available UK wide?

Yes… even though lockdown rules are different in Scotland, Wales and Northern Ireland, this scheme is available to all small or large employers across the UK. It is also worth pointing out that you/your employer don’t need to have used the furlough scheme previously to qualify. You simply need to have been on the payroll on 30th October to be eligible (specifically an RTI payroll submission must have been made for you before this date). It is also worth pointing out that if you have been made redundant since 23rdSeptember 2020, then your employer will have the option to be able to rehire and then furlough you, although this is by no means obligatory on the employers.

Can I still work part time?

Yes. If your employer still wants you to work part time and furlough you just for the hours that you don’t work, then this is allowed, although it is assumed (again, not confirmed as of yet) that the employer will have to cover your normal rate wages for any hours that you do work.

Job Retention Bonus & Job Support Scheme

Back in July, it was announced in the Summer Economic Statement that there would be a £1000 ‘Job Retention Bonus’ introduced for any previously furloughed employee being retained until at least the end of January. With furlough being extended though, this now means that this is no longer on offer, although the Chancellor did state that they would look into something similar at the right time.

The Job Support Scheme that was due to replace the furlough scheme in November has also now been scrapped for the time being.

An IR35 side note

Whilst absolutely not guaranteed, it can only be hoped that the extension of the furlough scheme to March represents an understanding from the government of the ongoing turmoil that the pandemic is and will continue to wreak for the rest of the year and into 2021. When the IR35 reforms were delayed back in March 2020 (from April 2020 to April 2021), it was because, as Financial Secretary to the Treasury Jesse Norman stated “we will do whatever it takes to support the British economy through Covid-19”. It is clear from this extension that the government don’t see this pandemic being over any time soon, so one can only hope that this desire to ‘support the economy’ during the pandemic results in it being delayed again. But, as this year has proven… you’d need a crystal ball to figure out what’s going to happen next.

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