UPDATED 17 DECEMBER 2020
More details on the third version of the furlough scheme covering the period 1 November 2020 to 31 March 2021 have been released.
Note that on 17 December 2020, the Chancellor extended the furlough scheme to 30 April 2021.
This version of the Coronavirus Job Retention Scheme (CJRS) replaces what was meant to be the Job Support Scheme, but that has been put on hold until at least May 2021. The Job Retention Bonus will no longer be paid in February 2021 as CJRS will be available at that time.
Under CJRS, employees will receive 80% of their usual salary for hours not worked, up to £2,500 a month, paid for by the government. Employers will have to pay the relevant NICs and workplace pensions.
There is no maximum number of employees that employers can claim for (as opposed to furlough v2 up to 31 October where employers could only claim for the number of employees they had claimed for previous to June).
A factsheet, and a separate policy paper for furlough v3 were published to accompany the original announcement.
In addition, on 13 November 2020, a Treasury Direction (the legislation) was issued applying for the period 1 November 2020 to 31 January 2021.
Originally it was planned that the scheme applying after 31 January 2021 would be announced in January. However, the review was brought forward to 17 December 2020 and the government's contribution will remain at 80% up until 30 April 2021.
The Treasury Direction also withdraws the Job Retention) Bonus that would have been payable in February.
Employers looking to implement furlough agreements that have effect from 1 November 2020 and which are consistent with employment law could do so before 13 November 2020 to be effective, though that window has now closed.
Also note that claims for periods beginning on or after 1 November 2020 will need to be submitted by the 14th day of the following month (see our separate article on this).
Additionally, different calculations will need to be applied where new employees have been recruited between 20 March 2020 and 30 October 2020.
HMRC has also made clear that it will publish employer names for companies and Limited Liability Partnerships that have made claims under the furlough scheme for the month of December onwards.
The detailed guidance for the scheme is now available via the links below.
Directors
Previously excluded from the furlough scheme were directors of owner-managed companies who had reported their annual payment for 2019/20 to HMRC after 19 March 2020.
Under furlough version 3, directors can be included if they have earnings reported by 30 October 2020.
The furlough rate is based on what they reported in the period 20 March to 30 October 2020, subject to the £2,500 monthly pay cap, pro-rated to the number of furloughed hours as a proportion of usual hours.
Covid transition hub
Check out our Business after COVID-19: Transition Knowledge Hub for more guidance and advice on managing the pandemic.