Furlough extended until 30 September 2021: key information for employers

The Coronavirus Job Retention Scheme, which was due to end on 30 April, has been extended to 30 September 2021. From 1 July, employers will be required to contribute towards the costs of unworked hours.

Extended furlough scheme - key information for employers

• UK-wide: The extended furlough scheme applies throughout the UK.

• Business open or closed: It can be used whether your business is open or closed.

• Full or part furlough: Employees can be furloughed for all of their usual hours, or can work part-time and be furloughed for the remainder of their usual hours.

• Government payment: Until 30 June 2021, for unworked hours, the government will pay 80% of employees' wages, capped at £2,500 per month (with the cap being proportional to hours not worked). In July 2021, for unworked hours, the government will pay 70% of employees' wages, capped at £2,187.50. For August and September 2021, for unworked hours, the government grant will cover 60% of employee's wages, capped at £1,875 per month.

• Employer payment: Until 30 June 2021 you will need to pay employees' wages for hours actually worked, and employer national insurance and pension contributions on the full amount paid to the employee (including any scheme grant). In 1 July 2021, in addition to wages for hours actually worked and employer national insurance and pension contributions on the full amount, you will need to contribute 10% towards the costs of unworked hours, capped at £312.50. This contribution to the costs of unworked hours will then rise to 20% during August and September 2021 (capped at £625 per month).

• Top-up: You can top-up employees' wages but are not obliged to.

• Used furlough before? You don't need to have used furlough before, and employees don't need to have been furloughed before.

• Employee eligibility: For claim periods up to 30 April 2021, employees must have been on your PAYE payroll by 23.59 on 30 October 2020 - you must have made an RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee. For claim periods from 1 May 2021, employees must be on your PAYE payroll by 23.59 on 2 March 2021 - you must have made an RTI submission to HMRC 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee.

• Eligibility of employees who were made redundant or stopped working for you: Employees who were employed and on your payroll on 23 September 2020 and who were made redundant or stopped working for you afterwards can be re-employed and claimed for – you must have made an RTI submission to HMRC from 20 March 2020 to 30 October 2020, notifying a payment of earnings for those employees. You are not, however, obliged to re-employ former employees - contact us if you would like to discuss this. It seems that employees who were not re-hired by 2 March 2021 cannot be claimed for after the end of April 2021 because claims from May onwards can only be made for employees on the PAYE payroll on 2 March 2021.

• Employees on notice: You cannot make a furlough claim for any days on or after 1 December 2020 during which a furloughed employee is serving a contractual or statutory notice period for you.

• No minimum furlough period: There is no minimum furlough period, but each claim period must be for at least 7 consecutive days. You can rotate employees on and off furlough.

• No maximum number of employees: There is no maximum number of employees you can claim for in one claim period.

• Calculating claims: There is government guidance, including on calculating reference pay and usual hours, here and here. The guidance on calculating claims from 1 May 2021 is still to be published.

• When do we need to claim by? The monthly deadlines for making claims are set out in this guidance.

• Employer names to be published: HMRC will publish the names of companies and LLPs who make a furlough claim (unless you are permitted to ask them not to, as set out here).

• Furlough agreements: To be eligible for the furlough grant, you must have confirmed to an employee (or reached collective agreement with a trade union) in writing that they have been furloughed. Best practice is to get written confirmation from the employee that they agree to the changes. Furlough agreements must reflect the hours employees actually work and don't work over the period of the agreement, and satisfy the other terms of the furlough scheme. Workbox by Brodies users can access a template furlough letter via our Coronavirus materials.
  

• Written records: Keep a written record of furlough agreements for 5 years, and keep records of how many hours employees work, and how many hours they are furloughed, for 6 years.

There is detailed government guidance on furlough, and Workbox by Brodies users can access more detailed FAQs via our Coronavirus pages.