Furlough scheme extended until March 2021

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On Thursday 5 November, the Chancellor further extended the furlough scheme until the end of March 2021. This decision comes amid growing concerns over the challenges faced by businesses as a result of the second lockdown, and just days after Mr Sunak’s original statement in which he announced that the scheme would only be extended by one month until 2 December before being replaced by the less generous Job Support Scheme.

As was previously confirmed, applications for furloughed staff will be capped at 80% of wages, up to a ceiling of £2,500, for normal hours not worked by an employee, and employers will only have to contribute in respect of NICs and pension contributions. The employer contribution level will be reviewed at the beginning of 2021. Both the new Job Support Scheme and the Job Retention Bonus will be shelved as a result of this extension to the furlough scheme, although some form of retention bonus will be deployed in the future by the government at the appropriate time.

Employers will have flexibility to use the furlough scheme for employees for any amount of time or shift pattern, furloughing employees on either a full-time or part-time basis, and will be able to vary the hours worked in agreement with the employee. Neither the employer nor the employee needs to have previously claimed to make a claim under the extended furlough scheme. An employer can claim for employees who were employed and on its PAYE payroll on 30 October 2020.

As before, we strongly advise that you obtain your employees’ written agreement to any changes to their terms of employment, please let us know if you have any queries or need any support. Further details and guidance on the scheme will be published by the Government on 10 November.