We have put together some more information for any of you who have been using the furlough scheme already, or for those of you who feel you now need to use it going forward.  If you would like Leggate Associates to submit your claim on your behalf, please contact us.

Key points to note:

  • The CJRS is being extended until 31 March 2021 but will be reviewed in January 2021.
  • 30 November 2020 is the last day employers can submit or change claims for periods ending on or before 31 October 2020.
  • The CJRS will remain open until 31 March 2021. From 1 November 2020 employers can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.  Employer’s must still pay the cost of employer NICs and pension payments.
  • Employers can claim for employees who were employed on 30 October 2020, as long as they have made a PAYE RTI submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee. This may differ where they have  re-employed an employee after 23 September 2020.
  • All employers with a UK bank account and UK PAYE schemes can claim the grant.
  • They do not need to have previously claimed for an employee before the 30 October 2020 to claim for periods from 1 November 2020.
  • Employers can furlough employees for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked.
  • Employers might need to contribute towards the cost of their furloughed employees’ wages for these periods.

Employers can:

  • fully furlough employees – meaning they cannot undertake any work for them while furloughed full time
  • flexibly furlough employees – meaning they can work for any amount of time, and any work pattern, but they cannot do any work for them during hours that employers record them as being on furlough

The employee can:

  • take part in training
  • volunteer for another employer or organisation
  • work for another employer (if contractually allowed)

Keeping employee rights

Employees still have the same rights at work, including:

  • Statutory Sick Pay (SSP)
  • annual leave
  • maternity and other parental rights
  • rights against unfair dismissal
  • redundancy payments

Employers can continue to claim for a furloughed employee who is serving a statutory notice period, however CJRS grants cannot be used to substitute redundancy payments.

Holiday pay

Furloughed employees continue to accrue leave as per their employment contract.

Employees can take holiday whilst on furlough, but should not be put on furlough simply because they are on holiday. If an employee is flexibly furloughed then any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours.

If the pay period being claimed for includes days in more than one month

Claim periods starting on or after 1 July 2020 must start and end within the same calendar month. For these months, if the pay period includes days in more than one month, employers will need to submit separate claims covering the days that fall into each month. Each of the claims should be calculated separately.

Claim periods cannot overlap, so employers will need to make sure they include all of the employees they want to claim for in each claim they make.

Complexities

Special rules apply where employees:

  • have wages and salaries which attract irregular bonuses or additional payments,
  • receive non discretionary overtime payments
  • are returning from family related leave
  • Are returning to work after sick leave

If you have any of these or other unusual payment issues, we can assist in guiding you through the legislation.

Employee’s usual hours and furloughed hours

There are some quite non-intuitive (to say the least!) rules on how to calculate “normal hours”. We will handle all aspects of this on your behalf.

Company directors

As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme.  Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company during hours which they are recorded as being on furlough, they may do so provided they do no more than would reasonably be judged necessary for that purpose, i.e. they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.

This also applies to salaried individuals who are directors of their own personal service company (PSC).

We strongly advise you to seek appropriate advice before taking action on any of the points listed above.

All information contained in this document are correct at the time of writing.  Legislation and regulations may change at any time.

If you are in any doubt, please call us for clarification.

About us:  Leggate Associates Limited was formed by Andrew Leggate LL.B FCMA FCA CGMA who has over 40 years of tax and accountancy experience in industry and practice, and the practice is managed by Joanne Leggate FMAAT, ATT (Fellow).  Our clients range from building subcontractors to multi-million pound concerns and high net worth individuals all over the UK.  Please see our website www.leggateassociates.co.uk  or follow @LeggateAssoc on Twitter for occasional updates.

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