The Chancellor says he has made the changes to give businesses and employees across the UK “certainty into the New Year”. Some 9.6 million people have been placed on furlough across the UK since the scheme’s launch last March, and more than a million businesses have accessed loans to help them through the crisis.
The date of the next Budget was also announced today. It’ll take place on 3 March 2021, and Sunak said it will deliver the next phase of the Government’s plan to tackle the virus and provide wider Covid-19 economic support. Crucially, the Budget will take place more than 45 days before the new end date of the furlough scheme – this is important as 45 days is the redundancy notice period employers usually have to give.
See our Coronavirus Employees’ Help, Bounceback Loans and Redundancy Help guides for more info.
How will the furlough extension work?
The furlough scheme’s been extended by a month, but will otherwise remain unchanged UK-wide – here are the key need-to-knows:
- The furlough scheme will now run until 30 April across the UK. It had been due to run until the end of March with a review scheduled for January.
- Employees on furlough will continue to get 80% of their salary for hours not worked, up to £2,500/month. The state will pay 80% of salaries for hours not worked until the end of April. Employers will only be required to pay wages, National Insurance Contributions (NICs) and pension contributions for hours worked, plus NICs and pensions for hours not worked.
- Employers across the UK can use the scheme – even if they haven’t before. It’s open to small, medium and large employers, and those which are charitable or not-for-profit – and crucially your employer doesn’t previously need to have used the furlough scheme.
- You DON’T need to have been furloughed before to take part. However, you do need to have been on your employer’s PAYE payroll on 30 October 2020 to be eligible. (To be precise, your employer must have made a Real Time Information payroll submission on your behalf on or before 30 October 2020). You can no longer submit furlough claims for claim periods ending on or before 31 October 2020. Claims for furlough days in December 2020 must be made by 14 January 2021.
- You CAN work part-time while on furlough. Your employer can either put you on furlough full-time, or you can work part-time and be furloughed for the hours you don’t work. Your employer will have to cover your wages at the normal rate for any hours you do work.
- You can’t work for your employer during the hours you’re furloughed. This includes your normal work obligations and anything beyond your usual remit. However, you can work for another employer while furloughed (if your contract allows this) or volunteer elsewhere.
- Employees on all types of contract can take part. This includes those on zero-hours contracts and fixed-term contracts, as well as agency workers (including those employed by umbrella companies) and supply teachers.
- Shielders unable to work because they’re deemed ‘clinically extremely vulnerable’ to coronavirus can be furloughed. It’s the employer’s decision whether to furlough you though. If you’ve asked and they won’t, check if you’re eligible for statutory sick pay.
The new Job Support Scheme – which had been due to start in December after furlough was initially expected to end – was “postponed” when it was announced in November that furlough would be extended for three months until the end of March 2021. We’ve asked the Treasury if it is still “postponed” and will update this story when we know more.