After much speculation, on Saturday 31st October 2020, it was confirmed that England would enter a second lockdown until 2nd December 2020.
With businesses across the country forced to shut their doors once again, the Prime Minister announced that the furlough scheme would be extended during the new lockdown.
As millions of people across England eagerly awaited the Prime Minister’s latest press conference, there were several rumours already swirling. The press conference confirmed what many already knew. Businesses would need to shut their doors for one month, leaving employees either required to resume working from home or without work.
As expected, the thought of a second lockdown left many employers and their employees anxious about the future. However, Boris Johnson confirmed that the furlough scheme would be extended during the new lockdown to support employers that would be unable to otherwise retain their employees.
How Will the Extended Furlough Scheme Operate During the New Lockdown?
Initially set to cease on Saturday 31st October, it was announced that the furlough scheme would be extended during the new lockdown until December 2020. The extension will see the furlough scheme continue to operate as it has in previous months.
As a result, employers will be entitled to claim financial support that will cover 80% of an employee’s monthly salary for the hours that they are unable to work. Those eligible for furlough include full-time employees, part-time employees, agency workers, employees on zero-hour contracts and apprentices.
The Government has additionally confirmed that employers will be able to continue taking advantage of flexible furloughing as the furlough scheme is extended. This will offer employees the ability to work part time hours even if they are furloughed.
It should be noted that although the furlough scheme has been extended during the new lockdown, employers will be required to cover any National Insurance and Pension contributions.
Do I Need to Have Claimed the Job Retention Scheme Before?
As you prepare for the new lockdown, you may be left worried that you will have had to have taken advantage of the furlough scheme previously to be eligible for the extension. We can confirm that even if your employees were not furloughed before 31st October 2020, you will be able to furlough them going forward.
The Government has stated that neither the employer nor the employee needs to have previously employed The Job Retention Scheme to be eligible for the furlough extension. They have further confirmed that all employers with a UK bank account and UK PAYE scheme can claim the grant.
What Will I Be Entitled To?
As touched on above, the Government has affirmed that they will once again cover 80% of an employee’s wage for hours not worked as the furlough scheme is extended during the new lockdown. Please note, the financial support provided as part of the extended furlough scheme will be capped at £2,500 per employee.
Employers that take advantage of flexible furlough will be responsible for paying employees for the hours that are worked, whether this is from home or the workplace, if permitted. If flexible furlough is applied, the furlough grant will cover the difference between the hours worked and the employee’s contracted hours.
Am I Eligible?
All employers will be eligible to claim the extended furlough scheme. However, there are several terms and conditions that must be met. These include;
- All employees that an employer wishes to claim the furlough extension for must have been on the businesses PAYE payroll by 30th October 2020.
- Employers will need to report the hours that have been worked by employees (if any) and the contracted hours that an employee would typically work.
- Employers must pay employees National Insurance and Pension contributions.
- Employers will be required to report and claim furlough for at least seven consecutive calendar days.
What About the Job Support Scheme?
As the furlough scheme was set to come to an end on Saturday 31st October, many employers had registered to claim the Job Support Scheme. This was due to start on 1st November 2020.
However, due to the extension of the furlough scheme, the Job Support Scheme has now been postponed.
The Job Support Scheme will now only be set in motion as the furlough extension comes to an end in December. However, it should be noted that the financial support originally outlined for retaining employees will now be reduced.
What About the Self-Employed?
Similarly to the furlough scheme being extended during the new lockdown for employers and their employees, those that are self-employed are set to obtain additional financial support from the Government.
It has been reported that the Self-Employed Income Support Scheme will be extended, offering two further grants to those that are self-employed or operate on a freelance basis.
The first grant will provide 80% of lost trading profits from November 2020 to January 2021. The funding, however, will be capped at £7,500.
If you are self-employed, you must have been eligible for the previous Self-Employed Income Support Scheme to be able to claim supplementary funding.
Contact The Financial Management Centre for Further Support and Advice
As employers and employees across England patiently await further announcements from the Government, it is entirely normal to want to ensure you are prepared.
Whether you find yourself in need of support or advice or hope to gain a better understanding of what the extended furlough scheme means for you, our team can help you. Not only can we help you determine which of your employees you can furlough, but we can support you as you take the appropriate steps in calculating your claim. We can even submit your request for you when the time comes.
Self-employed? Whether you need to estimate how much financial support you will be able to claim or wish to confirm if you were eligible for the previous Self-Employed Income Support Scheme, we can assist you.
As you wait for the extended furlough scheme to open, please feel free to contact us via telephone or email if you have any questions.