The Extended Furlough Scheme: How it Works

The Covid pandemic has impacted numerous businesses, around the world, and governments are doing their best to support companies in these uncertain times. In the UK, the extended furlough scheme has come into effect, which helps businesses to pay their employees. 

With Business Live reporting that many companies have gone into administration, the furlough scheme offers a lifeline for firms to stay afloat. Let’s take a look at the extended furlough scheme and how it’s helping businesses stay afloat. 

How Does the Extended Furlough Scheme Work?

The government furlough scheme is also known as the Covid job retention scheme (CJRS). It came into effect to protect people’s livelihoods and pays up to 80% of an employees salary when they’re on leave. 

Businesses can put their employees on furlough to reduce the strains of operating in tough times. While some companies can remain open, most non-essential shops and businesses have strict limitations. 

The maximum about payable is £2500, and the extended scheme promises to reduce the employee retention costs for businesses. Employers only have to make National Insurance and pension contributions, so they can avoid making their team redundant and protect their business for the future. 

Important Points to Mention 

Navigating the furlough scheme can be tricky for employers, but following these tips should make things easier. 

Submitting a Claim 

If you’re submitting a claim under the extended furlough scheme, you should make sure you have everything sent off by the 14th of December. If you’re unsure whether you’re eligible to claim, then click here to visit the Gov.UK website for more information. 

Written Agreements 

The government has agreed that any furlough agreement can be backdated to the 1st of November. But employers must have it in place by the 13th of November to be eligible. Your written agreement needs to be kept for five years because the HMRC will audit employers in the future, and they need to see evidence of furlough records. 

Redundancy 

The rules around redundancy can be quite ambiguous, but you can claim under the extended furlough scheme if your employees are serving their agreed notice period. But, the scheme can’t substitute redundancy payments. 

Most businesses are preparing themselves for late November, when agreed noticed period furlough payments become ineligible for the scheme. 

How Many Employees Can You Claim For? 

Under the old furlough scheme, there was a maximum number of employees that were eligible for payments. But now, you can claim for as many members of your team that you need to put on leave. 

Maternity Leave 

An employee might be able to end their maternity leave and move onto the furlough scheme, but they must give eight weeks notice. There will be no furlough payments during that period, and eight weeks is the absolute minimum. 

Further Support 

If you need any further advice or information, you can visit these useful resources. 

Employee Eligibility Check: Lists useful information on which employees you can claim for. 

Claim Calculator:  Helpful calculator to work out the amount you can claim. 

Employee Guidance: Help for employees to find out whether they’re eligible for the scheme. 

Hopefully, this blog post helps you to understand how the extended furlough scheme works. ZOOPHR are innovators in HR management software, but we also aim to provide businesses with helpful advice and support. 

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