Furlough 2021: What are the rules for furlough in January 2021?
Rishi Sunak announces £4.5 billion in lockdown business support
The recent months of lockdown restrictions have provided problems and uncertainty for UK businesses. Today (January 5) Chancellor Rishi Sunak announced further funding for businesses during the third national lockdown in England, and issued an update on the Government’s furlough initiative, the Coronavirus Job Retention Scheme.
The Chancellor had already announced £1.1billion of discretionary funding for local authorities, along with an extension to taxpayer-backed business loans until March 2021.
The Government’s furlough scheme was also recently extended until April 2021, with the aim of supporting businesses and preventing redundancies over the coming months.
But today the Chancellor also announced one-off top up grants for retail, hospitality and leisure businesses, worth up to £9,000 per property.
The Chancellor also announced a £594 million discretionary fund will be made available to support other impacted businesses through these difficult economic times.
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Mr Sunak said: “The new strain of the virus presents us all with a huge challenge – and whilst the vaccine is being rolled out, we have needed to tighten restrictions further.
“Throughout the pandemic we’ve taken swift action to protect lives and livelihoods and today we’re announcing a further cash injection to support businesses and jobs until the Spring.
“This will help businesses to get through the months ahead – and crucially it will help sustain jobs, so workers can be ready to return when they are able to reopen.”
When asked whether the Chancellor would consider extending the furlough scheme past April 2021, Mr Sunak said he would “take stock” of the support packages offered by the Government in March’s Budget.
What are the rules for furlough in January 2021?
Employers who cannot maintain their usual workforce because business operations have been affected by coronavirus can furlough their employees until April 30, 2021.
Up to cap of £2,500 per month, employers can claim for 80 percent of an employee’s usual wages for hours the employee does not work.
Employers will be responsible for paying employer National Insurance contributions and pension costs for employees while they are furloughed.
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Employers with a UK, Isle of Man or Channel Island bank account and a UK PAYE scheme are eligible to claim the furlough grant.
Employers can claim for their employee’s wages via the Government website for the Coronavirus Job Retention Scheme, and HMRC will assess these claims.
Employees who were employed on October 30, 2020 are eligible for furlough, but a PAYE RTI submission must have been made to HMRC between March 20 and October 30 notifying of a payment of earnings for the employee.
Further information on the furlough scheme can be found on the Government website HERE.
What are the rules on flexible furlough?
Under the Government furlough scheme, the guidance states employers can claim a furlough grant for hours not worked by an employee “for any amount of time and any work pattern”.
The Government guidance states: “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.
“Although flexible furlough agreements can last any amount of time, unless otherwise specified the period that you claim for must be for a minimum claim period of seven calendar days.”
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