Furlough scheme entitlement date extended to March

The Government has extended the furlough scheme to the 19 March from the 28 February, so now more employees can be placed on the Coronavirus Job Retention Scheme.

This update was revealed in HM Revenue & Customs (HMRC) furlough scheme guidance which was published on the 15/04/20.

It is estimated this makes an additional 200,000 employees eligible for the scheme.

The Treasury said:

Employers can claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020. This means that the employee must have been notified to HMRC through an RTI submission notifying payment in respect of that employee on or before 19 March 2020.

This change makes the scheme more generous while keeping the substantial fraud risks under control and is expected to benefit over 200,000 employees.

HMRC have been working at pace to delivering the scheme, which is due to be fully operational next week.

In order to do this, an employer will have to tell HMRC that a new staff member was put on the payroll, which can be done through the Real-Time Information (RTI) system which updates the tax authority when someone is paid.

NucleusHR regarding the new updates said:

There are an awful lot of questions that remain unanswered, which is only to be expected with the pace at which this scheme was made available to employers.

 

On 08/04/20 the Resolution Foundation think tank announced that the Coronavirus Job Retention Scheme could cost from £30 billion to £40 billion over the course of the next three months. This number is likely to rise following the amendments made to the scheme.

Torsten Bell, chief executive of the Resolution Foundation said:

By subsidising up to 80 per cent of workers’ wages, the scheme will help millions of workers who would otherwise face catastrophic hits to their living standards. The cost of the scheme depends on firms’ take-up and the length of time workers need to be furloughed for.

But with recent surveys implying that at least a third of the private sector workforce could be paid through the scheme, it is likely to cost as much as £30 billion to £40 billion over three months. The economic and social cost of mass unemployment in the absence of such a scheme would be far, far greater.