Chancellor of the Exchequer Rishi Sunak originally announced the furlough scheme in the spring of 2020, when the coronavirus pandemic first hit the country.
It covered 80% of employees’ salary (up to £2,500 a month) and currently, still does but employers now have to pay wages, national insurance contributions and pensions for hours worked alongside national insurance contributions and pensions for hours not worked.
Sunak most recently announced the scheme would be extended until the end of April 2021, with the eligibility criteria for the UK-wide scheme remaining unchanged and these changes will continue to apply to all devolved administrations.
What is furlough?
You can claim 80% of an employee’s usual salary for hours not worked, up to a maximum of £2,500 per month.
You can claim for employees who were employed on 30 October 2020, as long as you 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 you have made employees redundant, or they stopped working for you on or after 23 September 2020 and you have subsequently re-employed them.
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.
You will need to pay for employer National Insurance contributions and pension costs.
Who can claim furlough?
You must have:
- created and started a PAYE payroll scheme on or before 30 October 2020
- enrolled for PAYE online
- a UK, Isle of Man or Channel Island bank account
Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities.
You can only claim for furloughed employees that were employed and on payroll on 30 October 2020. This means you must have made a PAYE RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee. This may differ where you have made employees redundant.
- fully furlough employees - they cannot undertake any work for you while furloughed full time
- flexibly furlough employees - they can work for any amount of time, and any work pattern but they cannot do any work for you during hours that you record them as being on furlough
There is no minimum furlough period, agreed flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.
What about holiday pay?
Furloughed employees continue to accrue their leave as per their employment contract.
Employees can take holiday whilst on furlough. If they are flexibly furloughed then any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours.
What do you need to claim for furlough?
To make a claim, you will need:
- to be registered for PAYE online
- your UK, Channel Island or Isle of Man bank account number and sort code (only provide bank account details where a BACS payment can be accepted)
- the billing address on your bank account (this is the address on your bank statements)
- your employer PAYE scheme reference number
- the number of employees being furloughed
- each employee’s National Insurance number (you will need to search for their number using basic PAYE Tools if you do not have it, or contact HMRC if your employee has a temporary number or genuinely has never had one)
- each employee’s payroll or employee number (optional)
- the start date and end date of the claim
- the full amounts of employee wages you’re claiming for
- your phone number
- contact name
You also need to provide either:
- your name (or the employer’s name if you’re an agent)
- your Corporation Tax unique taxpayer reference
- your Self Assessment unique taxpayer reference
- your company registration number
- If you’re claiming for employees that are flexibly furloughed, you’ll also need:
- the number of usual hours your employee would usually work in the claim period
- the number of hours your employee has or will work in the claim period
- you will also need to keep a record of the number of furloughed hours your employee has been furloughed in the claim period
How to claim
You will need the Government Gateway user ID and password you received when registering for PAYE online.
To claim, click here.