The Coronavirus Job Retention Scheme has been extended until 31 March 2021, giving employers more to think about during lockdown and strategically in the run-up to Christmas.
Details of this extension of the scheme can be found here (which we recommend reading in conjunction with this update) whilst set out below is the government’s latest key updates to the scheme, as released on 10 November 2020.
This article summarises the latest position and is accurate as at 10 November 2020.
Published employer information
HMRC will be publishing employer names and company registration numbers of those companies and limited liability partnerships using the scheme. Publication of this information will begin from December 2020 and will relate to claims made under the scheme for December onwards.
Can the scheme assist with notice pay?
Employers can continue to claim for a furloughed employee who is serving a statutory notice period. However, as before, funds from the scheme cannot be used to substitute redundancy payments.
Crucially, the government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and, notably, will change the approach for claim periods starting on or after 1 December 2020.
Essentially, if you’re an employer considering dismissing an employee, you will need to give notice before 1 December 2020 in order to benefit from the scheme.
Further guidance on the expected change of approach is anticipated in late November.
How are fixed term employees affected?
For claim periods ending on or before 31 October 2020, employers can claim for employees on fixed term contracts – the normal eligibility rules will apply (see our previous note here).
For claim periods after 1 November 2020, if the employee’s fixed term contract hasn’t expired, it can be extended or renewed. An employer can place the employee on furlough leave and claim via the scheme, provided the employee was employed on or before 30 October 2020. To do this, employers must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee.
If the employee’s fixed term contract expired after 23 September 2020, they can be re-employed and claimed for as long as the other relevant eligibility criteria are met (more details are here).
What does this mean for employers?
While the government’s latest move demonstrates that it realises that employers, and their staff, will continue to face challenging times for months to come, the change in stance may also suggest that further national lockdowns could be expected over the coming months.
This extension provides reliable financial support to employers, allowing them some peace of mind, as well as time to evaluate their commercial position and, potentially, consider innovative means of improving the business’s operational structure and ways to reach customers in the current climate.
Clearly, and positively, the scheme should also remove, or heavily reduce, the need for employers to be actively considering, or making, redundancies at this time.
For tailored advice on the scheme, and/or furlough leave, please do get in touch.