It seems that not a month goes by without a change to the furlough scheme, and January was no different.  On 27 January, the Government published a new Treasury Direction which, in summary, confirms that the furlough scheme is formally extended until 30 April 2021.  

The Direction also confirms that when calculating an employee’s normal pay for purposes of a furlough claim in March or April 2021, the appropriate reference period is the same period in 2019, rather than 2020 (previous versions of the scheme say to refer to the ‘previous tax year’).  This is because many employees would have been furloughed, and thus on lower pay, in March/April 2020 meaning for this claim period they would receive 80% of their previous furlough pay, leaving them short-changed.

If your employee did not work for you in March/April 2019, you can only use the ‘averaging method’ to calculate 80% of their normal pay.

Finally, the new Direction changes the date for correcting claims.  If you have made a mistake on a claim you will have until the end of the following month to correct it.  Previously you would have had until the 15th of the following month.

Should you have any queries about the issues raised in this article, or on any employment related matter, please contact our expert Arvin Sandhu by email or on 01494 893 542.