Chancellor’s Statement to the House of Commons - 5th November 2020
UPDATE: The Chancellor announced changes to the furlough scheme on Thursday 17th December - the update can be read here.
Rishi Sunak has announced today that the Government will:
- Extend the Job Retention Scheme (furlough) until the end of March at the full rate of 80% or £2,500 as it was earlier this year
- Not pay the Job Retention Bonus Scheme (£1,000 per retained employee) in February but instead look to make a retention bonus at another time
- Increase the grant for self-employed individuals covering the Nov-Jan period, from 55% to 80% of trading profits at a cap of £7,500
What are the latest changes to the furlough scheme?
Flexible furlough remains in effect
There is no employer contribution for hours not worked. Employers will only be asked to cover National Insurance and Employer pension contributions for hours not worked
- Neither the employer nor the employee needs to have previously claimed or have been claimed for to be eligible for the extended scheme
- An employer can claim for employees who were employed and on their PAYE payroll on 30 October 2020.
- Employees that were employed and on the payroll on 23 September 2020 (the day before the Job Support Scheme announcement) who were made redundant or stopped working afterwards can be re-employed and claimed for. The employer must have made an RTI submission to HMRC from 20 March 2020 to 23 September 2020, notifying a payment of earnings for those employees.
A specialist Employment & HR solicitor’s view
This is very late in coming again from the Government but was clearly vital if large sectors of the economy are to close again. Many were expecting some support package but that it might have been more sector specific. In effect, the government has revived the furlough scheme as we were familiar with it in April.
The announcement that employees who were made redundant can, in some circumstances, be re-engaged and placed on furlough could be a welcome relief to many individuals but this will be entirely at the discretion of each business.
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