Most frequent questions and answers
Until Friday 20th March, the term ‘furlough’ was not a part of UK employment law. Taken from an American concept, the word originates in the Dutch ‘verlof’ which means a leave of absence. The term has probably been introduced to distinguish it from a ‘lay off’ which is the term used for a temporary redundancy with no pay in the UK.
If you have no work for all or some of your employees to do, then you can temporarily furlough them. The Government will cover up to 80% of wages to a maximum of £2,500 per month. You pay them through payroll and the Government reimburse you. The employee has to be on payroll on the 19th March 2020 to be eligible (note this was the 28th February but was changed on 15th April).
The last date an employee can be furloughed for the first time under the original scheme is 10th June 2020. Employees must have been furloughed for 3 consecutive weeks before 1st July 2020.
From August 2020 the scheme becomes contributory but the employee will still receive 80%.
From November 2020, the scheme is eligible for employees who were on the RTI submission on 30th October 2020. No previous period of furlough was required.
If employees can either work from home or if their work means it is essential for them to travel to work, then they remain employed as usual. The furlough scheme can not be used in this case. This also includes working for an associated or linked company (eg another subsidiary of the same group of companies). From 1st July 2020, this will change and employees can work part time whilst still remaining furloughed. The employer will pay for the hours the employee works with the taxpayer making up the balance.
If you are shielding, there is an exception to this. Contact us for more information.
The furlough scheme covers 1st March 2020 to 31st July 2020. From August to October, the scheme will be open but part of the cost will be borne by the employer.
From November 2020 to March 2021, the scheme becomes non-contributory again with the exception of pension and national insurance contributions (eg the same payment scheme as August 2020). Rishi Sunak has stated that the scheme will be reviewed again in January 2021.
Yes. if your employee genuinely stopped work on or after 1st March then you can backdate the period of furlough to that date.
Any employees you place on furlough must be furloughed for a minimum period of 3 consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of 3 consecutive weeks.
This is done with your RTI submission. You will need to provide information on your furloughed employees via that portal. This will include a reclaim of Employer’s National Insurance and minimum pensions automatic enrolment payments.
The first repayment was made in late April and we expect the same to follow each month after the RTI submission is made.
Unless you have a contractual right to to put someone on short time working or lay them off then you will need to get the employee’s agreement in order to place them on furlough. We recommend that you get the employee’s consent in writing to satisfy any auditing that HMRC may do after the event (which you should then retain for a period of 5 years) . If the employee agrees to the change then they will be converted to furlough status. If they don’t then you can place them at risk of redundancy.
Yes they can but caution should be applied when volunteering for the same organisation as you can not provide services for or generate revenue on behalf of the organisation. So for instance if an employee is paid for their role in a church or charity, then they can not work free of charge for the same church or charity. There is still considerable confusion in this area and as such we are awaiting further guidance. We therefore recommend you do not allow volunteering of this nature until the Government expressly says this is possible. However, they can volunteer in their communities.