Back arrowButton/calendaricon/lockicon/sponsor
Open search
Close search
Call us on0808 168 5874


Schools are now heading back, the Government is urging office workers to return to the workplace and the closure of the furlough scheme is approaching.  So what’s the latest on furlough leave?  Here, we touch briefly on four practical points to keep in mind if you have furloughed employees under the Coronavirus Job Retention Scheme (the ‘Scheme’):

1. Support levels tapered down from 1 September 

Since 1 September, the level of support provided by the Government under the Scheme has reduced, meaning employers now need to cover the cost of an extra 10% of furloughed employees’ pay (as well as the cost of pension contributions and national insurance contributions that employers have had to pay since August). Remember that furloughed employees are still entitled to 80% pay overall, subject to the cap.  

From 1 October, the Government contribution will be further tapered down, so employers will need to cover 20% of furloughed employees’ pay plus the cost of pension contributions and national insurance contributions (subject to the cap).  The Scheme is currently expected to close on 31 October 2020.

2. HMRC writing to employers who may have over-claimed under the Scheme

On 28 July, the Government published guidance on HMRC’s powers to impose penalties on employers who have claimed sums under the Scheme to which they are not entitled and have failed to repay these or notify HMRC of the overclaim.  Since then, it has been reported that HMRC has begun writing to employers that it believes may have claimed too much money through the Scheme based on the information it holds about them.  See our e-alert for further details about the government guidance, including what to do if you realise you have made a claim in error.

3. Approaching deadline for 45-day redundancy consultation while Scheme in place 

If it is looking as though you may need to make over 100 redundancies within a 90-day period (triggering a minimum 45-day statutory collective consultation period), it is worth noting that the deadline within which to do so while the Scheme is live will arise around mid-September.  It pays to plan ahead, so if collective redundancies within your organisation are looking likely we recommend starting to consider next steps now to ensure that your plans are as cost-effective as possible (see our earlier e-alert for further thoughts on timings and preparation).  

4. ‘Plan for Jobs’ including Job Retention Bonus

The Government’s ‘Plan for Jobs’, which was announced in July, outlined proposals to boost job creation in the UK, including the introduction of a Job Retention Bonus. Under the bonus plans, employers will receive a £1,000 one-off payment for each employee they bring back from furlough and continuously employ through to January 2021. 

For businesses to be eligible for the bonus, the employee will need to be paid at least £520 on average in each month from November 2020 to the end of January 2021 (equivalent to the national insurance lower earnings limit).  Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021.

The ‘Plan for Jobs’ also proposed further investment in traineeships and sector-based work academy placements, a £32 million investment in the National Careers Service and a doubling of Jobcentre work coaches. In addition, new apprenticeships will be supported by bonuses (employers will be entitled to a £2,000 payment for each young apprentice they take on under the age of 25 and £1,500 for those aged 25 or over) and a new "kickstart" job creation scheme will support 16-24 year olds on Universal Credit who are at risk of long-term unemployment.

How we can help

Our Employment Law Update webinar for members will take place on Tuesday 15 September 2020, at which our legal and policy experts will explore key employment law decisions from the last six months and forthcoming legislative and Government policy developments.  Book your place here.

In addition, our experienced HR and legal consultancy experts can give you the confidence to manage a redundancy process effectively, saving you time and money. Click here  to see how Make UK can help, including training your managers and representatives on their role. 

The Coronavirus FAQs on our website are also updated regularly and provide detailed guidance on furlough, self-isolation and other issues relating to Covid-19.  If you are a Make UK member, please contact your adviser with any queries you wish to discuss.  Alternatively, non-members are welcome to call us on 0808 168 5874, or email [email protected].




News / Coronavirus / Make UK / HR & Legal