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Furlough Scheme Extension – Treasury Direction

Posted: November 17, 2020
Posted: 17 November 2020

The Treasury Direction setting out the law on the extension of the Furlough scheme into 2021 has been published. This can be found here: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/935146/201112_CJRS_DIRECTION_No_5___CJRS_extension_1_Nov_-_31_Jan__SIGNED.pdf

Despite being dated 12 November, the Direction has received very little publicity. The Direction runs to 31 pages.

The direction only sets out the terms of the scheme until 31 January. This ties in with the Chancellor’s statement that, although the scheme would be in place until the end of March, the scheme would be reviewed in January:

‘3.CJRS is extended by this direction for the period-

(a) beginning on 1 November 2020, and

(b) ending on 31 March 2021.

4.The schedule to this direction sets out the scheme applying for the period-

(a) beginning on 1 November 2020, and

(b) ending on 31 January 2021

5.The scheme applying after 31 January 2021 will be set out in a further direction made by the Treasury in exercise of the powers conferred by sections 71 and 76 of the Coronavirus Act 2020.’

 

We will review the Direction over the next few days, but one change (which appeared in the latest guidance and has been confirmed in the law) is that furlough payments cannot be used for employees on notice where payment is made after 1 December. This will include cases where the employee was on notice and paid before this date – the payments from 1 December will not qualify for furlough.

‘Circumstances in which a CJRS claim may not be made

  1. A CJRS claim must not be made by an employer in respect of a day upon which their employee-
    (a) is on notice of termination of the employee’s employment with the employer on that day if that day falls in the period-
    (i) beginning on 1 December 2020, and
    (ii) ending on 31 January 2021, or
    (b) is taking an unpaid sabbatical or other period of unpaid leave on that day if that day falls in the period-
    (i) beginning on 1 November 2020, and
    (ii) ending on 31 January 2021.’

 

Finally, all the Treasury Directions, including this one, are in the following link, with an explanation of the chronology of the Directions at the bottom:

https://www.gov.uk/government/publications/treasury-direction-made-under-sections-71-and-76-of-the-coronavirus-act-2020

If you have any questions on this please contact us at info@burgesshodgson.co.uk