In the first day of the second lockdown, the Chancellor of the Exchequer, Rishi Sunak has announced that furlough leave is being extended until 31 March 2021.
The Chancellor announced that this was to provide essential support to businesses over the winter months and to protect millions of jobs. However, he also added that it will be reviewed in January 2021 (as was expected with the now-postponed Job Support Scheme).
Pending any further changes, the furlough leave scheme will continue to offer 80% of hours not worked up to a monthly cap of £2,500.
Employers can claim for employees who were employed and on their PAYE payroll on 30 October 2020. Importantly, if an employee was made redundant or otherwise stopped working for their employer on or after 23 September 2020, they can be re-engaged and claimed for under the extended scheme. However, the employer must have made a PAYE Real Time Information (RTI) submission between 20 March 2020 and 30 October 2020 making it clear that a payment of earnings was made to that employee.
Employers should continue to be vigilant over the application of the furlough leave scheme, particularly given that the government will be reviewing it early in the new year.
In the meantime, detailed guidance on its application is expected on 10 November 2020, although businesses should note that the Job Retention Bonus (like the Job Support Scheme) has been put on hold for the time-being.
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