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Treasury Direction on Furlough Scheme

Posted: January 26, 2021
Posted: 26 January 2021

The Treasury Direction has been published, setting out the legal basis for the extension of the furlough scheme from 1 February to 30 April 2021.

Treasury Direction made under Sections 71 and 76 of the Coronavirus Act 2020 – GOV.UK (www.gov.uk)

The link also contains previous Directions, with explanatory notes. The first document in the link is the latest, the Direction dated 25 January 2021.

The latest Direction sets out the changes to the calculations of “reference salary” and “usual hours”, as the scheme will be over a year old at its conclusion.

“On 25 January, the Chancellor made a Treasury Direction under Section 71 and 76 of the Coronavirus Act to extend the effect of the Coronavirus Job Retention Scheme (CJRS).

The Direction sets out that HMRC are responsible for the payment and management of amounts to be paid under the scheme. The schedule to this direction sets out the scheme applying for the period beginning on 1 February 2021, and ending on 30 April 2021.

Due to the overlap with the CJRS that was introduced in March 2020, this Direction modifies the rules to calculate the reference salary and usual hours.”

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