As we reported last week, on 5 November, the Government announced the extension of the Coronavirus Job Retention Scheme to 31 March 2021 (the Extended CJRS). Late in the day on 10 November, the Government updated its guidance on the scheme as it previously operated to provide detailed information on how the Extended CJRS will work.
As the Government explained when announcing the Extended CJRS, much of the guidance on the operation of full and flexible furlough remains the same as it was in the period from 1 July to 31 October. However, there are some key differences, which we consider below.
The current Government guidance is split across several webpages, all of which can be accessed from this central hub page.
Broader eligibility criteria and removal of maximum claim numbers
As was already clear from the initial policy paper on the Extended CJRS, eligibility for furlough is broader than it was previously. The Extended CJRS is open to employers that have not previously used the CJRS. In addition, whereas an employee was only eligible to be furloughed between 1 July and 31 October 2020 if they had previously been furloughed for at least three consecutive weeks in the period from 1 March to 30 June 2020, the Extended CJRS is open to employees who have not previously been furloughed, provided they meet the other eligibility criteria. (In order to be eligible under the Extended CJRS, employees must have been employed and had an RTI submission made in respect of them by 30 October 2020 – although significantly if they were employed on 23 September 2020 but subsequently left employment they can be rehired in order to be furloughed.)
The guidance on the Extended CJRS now makes clear that the limit on the number of employees an employer could claim for in the period between 1 July and 31 October (namely, the maximum number of employees it had claimed for in any single claim before 30 June) no longer applies. There is no maximum number of employees an employer can claim for from 1 November 2020.
Question mark over claims during notice period in event of redundancy
The Government guidance for employees makes clear that an employer can make an employee redundant while they are on furlough or afterwards and the guidance for employers states that employers can currently continue to claim for a furloughed employee who is serving their notice period (although grants cannot be used to substitute redundancy payments and employers must base statutory redundancy and notice pay on employees’ normal wages rather than the reduced furlough wages).
However, one change that may cause concern for employers that find themselves having to contemplate redundancies notwithstanding the extension of furlough is the statement in the latest guidance that the Government is reviewing whether employers should be eligible to claim for employees serving notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further guidance published in late November.
This change of approach is not entirely unexpected, given that the Job Support Scheme which was previously due to replace the furlough scheme would not have permitted employers to make claims during the notice period where employees had been dismissed as redundant. Since one of the Government’s aims in extending furlough was to protect jobs, it is perhaps unsurprising that it would seek to prevent employers using the furlough scheme to subsidise the cost of notice pay where jobs are being lost. A key question will be at what point the Government chooses to cut off employers’ ability to claim under the extended CJRS for employees affected by proposed redundancies. Will it only be the notice period which cannot be claimed for? Or will the Government prevent claims in respect of affected employees during a redundancy consultation process too? We hope for clarification of these questions in the guidance expected later this month.
Publication of names of companies that use the Extended CJRS
Over the past few months, there have been media reports of companies that have done better than anticipated during the pandemic taking the decision not to claim support under the furlough scheme, or to hand back grant payments they have already received. HMRC has also commented publicly on its concerns about the level of fraudulent claims that have been made, e.g. by employers that have required their employees to work while on full furlough.
The updated Government guidance states that HMRC will publish employer names of companies and Limited Liability Partnerships who have made claims under the furlough scheme from the month of December 2020 onwards. We assume that this is intended to dissuade employers from relying on the Extended CJRS for support if they do not really need to do so and to deter fraudulent claims.
Monthly deadline for claims
As before, employers can submit their claims before, during or after they process their payroll. However, claims made in respect of periods from 1 November 2020 must be submitted by 11.59pm 14 calendar days after the month the employer is claiming for. For example, claims for the month of November must be submitted by 11.59pm on 14 December. The Government guidance notes that if this time falls on the weekend then claims should be submitted on the next working day.
HMRC may accept a claim made after the relevant deadline if an employer can show that it had a reasonable excuse for failing to make a claim in time and then claimed without delay after the excuse no longer applied. However, it is important to note that HMRC will not consider reasonable excuses in advance of a claim deadline, so employers cannot plan in advance to submit their claims late.
In addition, employers who realise that they have claimed too little will only be able to increase the amount of their claim if they amend the claim within 28 calendar days after the month to which the claim relates (or the next working day if the relevant date falls on a weekend).
How we can help
We are in the process of reviewing the latest Government guidance and will be updating our FAQs on the Extended CJRS as soon as possible.
If you are a Make UK member, please feel free to contact your adviser with any queries you wish to discuss. Throughout the pandemic we have been advising our members on a full range of Coronavirus related queries, including self-isolation, home-working and the data protection implications of Covid-19 on HR practices.
Alternatively, non-members are welcome to call us on 0808 168 5874, or email [email protected].
Finally, look out for our vlog, Lockdown Lowdown: The Headlines for HR Managers. The first episode, recorded on 5 November, covered the new rules of lockdown in England, the implications for employees who are clinically extremely vulnerable and the extension of furlough to 31 March 2021. The next episode is due out at the end of this week, so watch this space!