Furlough scheme extension: How to get claims right

The Job Retention Scheme has been extended until the end of September 2021, and if you’re keeping staff on furlough, you need to follow the right legal processes. Here’s how…

Tuesday, Mar 09, 2021
3 min read

On Wednesday 3rd March 2021 the Chancellor confirmed in his Budget that the Job Retention Scheme (or ‘furlough scheme’) will remain in place until the end of September 2021.

So far, the scheme has protected more than 11 million jobs since March 2020, and it will continue to help employers, like you, retain and support your staff—whether that’s keeping staff on furlough, or putting staff on furlough for the very first time.

Why has there been an extension?

The furlough scheme was originally due to finish at the end of April 2021, but the extension follows on from the government’s roadmap to end lockdown in England.

The roadmap sets out a number of dates where different restrictions could lift, including pubs and restaurants being able to open for indoor service on 17th May at the very earliest—meaning the sectors that rely on furlough the most would not be fully open by the end of April.

This furlough extension is great news for employers, as it means that you can continue to have staff on furlough, whether your business is closed temporarily or even after it’s reopened.

Some furlough rules remain the same…

Many of the furlough rules will remain the same under the scheme’s extension:

  • If you’ve had to close your business or can’t operate as normal because of the government’s restrictions, you can claim full furlough for your staff.
  • You can also choose to claim flexible furlough grants. So if you’re able to bring staff back for part-time hours only, you can claim furlough grants for the hours they’re not working.
  • Full furlough grants will cover 80% of staff pay, up to a maximum of £2,500 per person, per month—but only until the end of June.

But there are some new furlough rules, too…

  • Employer contributions to wages will begin in July, at a rate of 10%. The government will contribute 70% towards staff wages.
  • In August and September, employer contributions will rise to 20%. The government will contribute the remaining 60% towards staff wages.

Who can be placed on furlough?

You can place staff on furlough, whether they’ve previously been furloughed or you’re putting them on furlough for the first time.

And it doesn’t matter how many hours your employee is employed for, whether they’re on a full-time, part-time, flexible or zero-hour contract—they’re all eligible for the furlough scheme.

There are also some new eligibility requirements

  • Right now, workers must have been on their employer’s payroll on (and been paid by) 30th October 2020…
  • But From 1st May 2021, that date changes to 2nd March 2021, which means that people who were on their employer’s payroll on (and had been paid by) 2nd March 2021 can be furloughed—opening the scheme up to employees more recently recruited who would otherwise not qualify.
  • This might sound a bit tricky, but it gives employers, like you, much more flexibility on furlough decisions in the future.

How do I make a claim?

To put an employee on furlough, you’ll need to:

  1. Get formal agreement from employees that they will be furloughed.
  2. Communicate all important information to your furloughed staff with official correspondence.
  3. Submit accurate details to HMRC in order to claim your employees’ wages.
  4. Keep records of this correspondence for five years in-line with HMRC laws.

It’s a simple process, but getting it wrong could land you in hot water with HMRC. That’s where we come in…

BrightHR’s furlough navigator tool

Our smart software gives you everything you need to get furlough right.

Just log in to record employee furlough statuses, download accurate reports to speed up your HMRC application process, and even access professional furlough letter templates to help you communicate furlough extensions to your staff.

Plus, with our easy-to-use rota planner you can plan out flexible furlough with ease and keep a clear record of when your staff are working and when they’re on furlough.

Navigating your business through the coronavirus pandemic can be challenging, but BrightHR makes putting staff on furlough as simple, straightforward and stress-free as possible. To find out more about the furlough navigator tool and how it can help your business, book your free demo today.

Share this article