Update on Furlough

21 January 2021

Shortly after the third national lockdown in England was announced on 4 January 2021, HMRC updated its guidance to employers in respect of the types of employee who are eligible to be furloughed.

It has been made clear that an employee can be furloughed if they are unable to work, including from home or working reduced hours because they:

•  are clinically extremely vulnerable, or at the highest risk of severe illness from coronavirus and are following public health guidance; or
• have caring responsibilities resulting from coronavirus, such as caring for children who are at home as a result of school and childcare facilities closing or caring for a vulnerable individual in their household.

Perhaps the most significant part of this updated guidance is in respect of parents who need to stay at home to look after school-age children. It is now clear that they are eligible to be furloughed. However, it remains the case that it is up to an employer as to whether or not they choose to furlough an employee.

As things stand, the Government contribution towards 80% of the salary of employees for hours not worked (up to £2,500) will continue through to 30 April 2021.

Employers will still be required to pay staff as normal (including benefits) for any hours worked, and will continue to be responsible for National Insurance contributions and auto-enrolment pension contributions for any hours spent by an employee on furlough. To be eligible to be furloughed, the employee must have been on the employer’s payroll as at 30 October 2020.

We will of course keep you updated if there are any further significant changes to the scheme.