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[Employment] An Update on the Furlough Scheme

08 January 2021

Jasmine Chadha



Just one month after the re-introduction of a stricter tier system, England has returned to a full national lockdown in yet another effort to suppress the coronavirus. Hospitality and retail businesses continue to bear the brunt of restrictions with millions of pounds of Christmas revenue already lost, adding to the estimated 660,000 job losses across the beleaguered sectors.  


Here are some important points to bear in mind in this current phase of the pandemic:


1. The current lockdown measures will be reviewed on 15 February 2021.

2. Businesses in the retail, hospitality, and leisure sectors will be given a one-off grant worth up to £9,000 (depending on rateable value) in addition to the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme, and the Coronavirus Large Business Interruption Loan Scheme.

3. Everyone who can work from home should continue to do so. 

4. All workplaces must be Covid-secure for those employees that are unable to work from home. 

5. The Job Retention Bonus Scheme has been withdrawn.

6. The Coronavirus Job Retention Scheme will continue until 30 April 2021 with the government continuing to contribute 80% towards wages for hours not worked, up to a maximum of £2,500 per month.

7. Employers are required to pay wages, National Insurance Contributions and pension contributions for hours worked; and only National Insurance Contributions and pension contributions for hours not worked.

8. Businesses have the flexibility to enter into part-time or full-time furlough arrangements and can agree on working hours and shift patterns with employees to suit business needs.


Furlough agreements must already be in place by the start of the claim period, but such agreements can be varied during that period. 


1. Employers should continue to review the agreements they have with employees during the current phase.

2. HMRC will publish the names of employers who have made claims under the furlough scheme.

3. If an employee wishes to end her maternity leave early to be furloughed, she must give at least eight weeks’ notice and cannot be furloughed until the end of that period.

4. There are much tighter timescales for submitting a furlough claim:


Claim period Deadline

December 2020 14 January 2021

January 2021 15 February 2021

February 2021 15 March 2021

March 2021 14 April 2021


HMRC has updated its guidance as to what may be a “reasonable excuse” for failing to submit a claim in time. This includes being incapacitated by a serious or life-threatening illness (including Covid-19), the death of a close relative, self-isolation with no one else to submit the claim, or IT failures.

In a recent newsletter, we also discussed problems relating to annual leave during the pandemic. This can be accessed here.here. We are ready to support and guide your business through these very challenging times. Please get in touch with your usual 3CS contact.



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Solicitor/Associate/Employment

Jasmine Chadha


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