If you cannot maintain your workforce because your operations have been affected by coronavirus (COVID-19), you can furlough employees and apply for a grant to cover a portion of their usual monthly wage costs where you record them as being on furlough.
The Coronavirus Job Retention Scheme has been extended until 30 April 2021. You can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.
You can claim for employees who were employed on 30 October 2020, as long as you 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. This may differ where you have made employees redundant, or they stopped working for you on or after 23 September 2020 and you have subsequently re-employed them.
All employers with a UK, Isle of Man or Channel Island bank account and UK PAYE schemes can claim the grant. You do not need to have previously claimed for an employee before the 30 October 2020 to claim.
Employers can furlough employees for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked.
You will need to pay for employer National Insurance contributions and pension costs.
Who can claim?
You must have:
- created and started a PAYE payroll scheme on or before 30 October 2020
- enrolled for PAYE online
- a UK, Isle of Man or Channel Island bank account
Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities.
You can only claim for furloughed employees that were employed and on payroll on 30 October 2020. This means you must have made a PAYE RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
Check how different employment conditions affect eligibility
There are different groups of employees that are eligible for the scheme.
- If your employee is on a fixed term contract.
- If you employ apprentices.
- If your employee has more than one job.
- If your employee had multiple employers over the last year.
- If your employee does volunteer work.
- If your employee does training?
- Employee transfers under TUPE and on a change in ownership.
Check the government wage page for further advice..
If you’ve made your employees redundant
Where you must make redundancies, you should do so in accordance with the normal rules. This includes giving a notice period and consulting staff before a final decision is reached. For claim periods relating to November, you can continue to claim for a furloughed employee who is serving a statutory notice period, however grants cannot be used to substitute redundancy payments.
For claim periods starting on or after 1 December 2020, you cannot claim for any days on or after 1 December 2020 during which the furloughed employee was serving a contractual or statutory notice period for the employer (this includes people serving notice of retirement or resignation). If an employee subsequently starts a contractual or statutory notice period on a day covered by a previously submitted claim, you will need to make an adjustment.
If you make an employee redundant, you should base statutory redundancy and statutory notice pay on their normal wage rather than the reduced furlough wage.
If you receive public funding
If you have staff costs that are publicly funded (even if you’re not in the public sector), you should use that money to continue paying your staff, and not furlough your staff.
Organisations can use the scheme if they are not fully funded by public grants and they should contact their sponsor department or respective administration for further guidance.
HMRC has updated its guidance to state that employers can (not must) furlough employees whose health has been affected by coronavirus (COVID-19) or any other conditions, including if they are unable to work from home, or working reduced hours, because they:
- are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and following public health guidance
- have caring responsibilities resulting from coronavirus (COVID-19), such as caring for children who are at home as a result of school and childcare facilities closing, or caring for a vulnerable individual in their household
This resolves an area of uncertainty, which is whether parents who stay at home to look after school-age children are eligible for furlough. They are.