This week has been dominated with the Furlough word! Information released by HMRC shows that 140,000 firms applied for cash to pay their furloughed workers within eight hours of the new Furlough portal going live ...
Rishi Sunak, Chancellor of the Exchequer said, "we have never seen a crisis like this one". Last week, The Office of Budget Responsibility said that the furlough scheme alone is going to cost the country £42 billion over the next three months.
A big thank you to all of our clients for their patience while we make progress through the list of furlough applications. We have put every resource we can into this project, and I am pleased to report that the portal does seem to be relatively stable. Applications are getting through, and the first payments should start to filter through to your bank accounts from next Tuesday.
To recap, under the furlough scheme, 80% of employees are covered by the Government up to a maximum of £2,500 per month!
As with all schemes, there are pitfalls, and it needs to be administered correctly. Although there is plenty of guidance issued out there which is being regularly updated, there can still be complications in the process.
For example, last Friday (17th April) it was announced that employees who had already booked a holiday during the furlough period can still take their holiday. The payment they would receive for a holiday is their regular rate of pay or, where the rate of pay varies, calculated on the basis of the average pay received by the employee in the previous 52 weeks.
If an employee usually works on bank holidays, then this will be included in the furlough grant payment as any other day. However, if the employee usually takes the bank holiday as leave, then the employer would either have to top up their pay to the usual holiday pay level or give the employee a day off in lieu.
We are still awaiting clarification as to whether or not an employer can require an employee to take a holiday while on furlough leave without breaking the furlough leave period. The guidance states, "During this unprecedented time, we are keeping the policy on holiday pay during furlough under review".
Secondly, I read in the press that some employers are making furlough applications for their staff who are still working and to make it worse, back-dating this to 1st March 2020 when there was no intention to make someone redundant.
HMRC are fully aware of this and with far-reaching powers will be carrying out checks. To speed things up, they are encouraging employees to whistle-blow on their employers using a special hotline. As HMRC have requested that all signed furlough agreements are kept for a minimum of five years, we can only assume that they are taking this very seriously indeed.
If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.