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Furloughing: What has changed? Eight things to be aware of

By Kevin Russell | 11 December 2020

Great! Chancellor Rishi Sunak has extended the Coronavirus Job Retention (‘Furlough’) Scheme again. This time until 30 April 2021. But as the Scheme has been extended, the rules or calculations or both have changed. So what are the key things that you need to be aware of in making claims under the latest (‘new’) Scheme from 1 November?


  1. Claims deadlines

Until now, claims had to be made for the whole Scheme period by a certain date. But going forwards, monthly claims will need to be made under the new Scheme. The deadline is the 14th of the month following the month of claim. Claims not made in time will not be paid. It will however, be possible to increase the amount of a claim if it is amended within 28 calendar days after the month the claim relates to.


  1. Eligibility

Under the new Scheme, there is no need for employees to have been previously furloughed or for the employer to have previously used the Furlough Scheme. To be eligible, employees must have been employed on or by 30th October 2020. There are two exceptions:

  • Employees made redundant after 23 September 2020, or
  • Employees on a fixed-term contract which expired after 23 September 2020.

In both cases, the employee can be re-employed and placed on furlough.


  1. Changes to the definition of Usual (or ‘Reference’) Pay

The reference period for calculating Usual Pay has changed under the new Scheme for some, but not all, employees. Employers need to be aware of the change.


  1. New written agreements with employees are required

Employers must confirm to their employee (or reach collective agreement with a trade union) in writing that they have been furloughed. This has to be agreed before any Furlough grant can be claimed. There is no backdating.


  1. What about Scheme changes in January?

Whilst the new Scheme from 1 November increased the amount of the Furlough grant back to 80% of employees’ pay, this was only guaranteed until 31 January 2021 when the Government said that they would review the Scheme and may change the level of their contribution for February and March. However, the Chancellor announced on 17 December that he has decided to retain the 80% grant right through until the end of the extended Scheme on 30 April.


  1. Make very sure that you are claiming the right amount

It is very important that employers claim the right amount. So, check and double check.


If a Furlough grant (either under an earlier version or under the new Scheme) has been over-claimed and not repaid, the employer must notify HMRC by the latest of either:

  • 90 days after the date of receipt of the grant the employer was not entitled to
  • 90 days after the date the employer received the grant that they were no longer entitled to keep because their circumstances changed
  • 20 October 2020 (the date of Royal Assent to the Finance Act 2020)


Failure to notify HMRC within these time limits may result in a penalty.


  1. Guidance

Our COVID-19: Guidance and resources for churches, charities and Christian workers covers the Furlough Scheme and the recent changes in more detail. There are also a large number of HMRC published Guidance documents for which you can find topical links from our COVID-19 Guidance and resources page.


  1. Publishing details of claimants

In the interests of transparency and to fight fraudulent claims, HMRC will publish the names, value of claims and Company Registration Numbers of employers who make Furlough Scheme claims from December.


Employees will also be able to check if their employer has made a Furlough claim for them via their online Personal Tax Account from February.

Where HMRC charge a penalty for a deliberate default, they will consider publishing details of the defaulter online.


Claim for wages through the Coronavirus Job Retention Scheme

Penalties for not telling HMRC about coronavirus (COVID-19) support scheme overpayments

COVID-19: Guidance and resources for churches, charities and Christian workers

Posted by Kevin Russell

Our Legal Eagle guru and Stewardship's Technical Director, Kevin constantly has his finger on the pulse of all things tax and charity law-related. His briefing papers for charities, churches and individuals are an invaluable resource on everything from VAT to Gift Aid. 


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