Wednesday, 27 January 2021
East Midlands Chamber warns businesses about furlough changes that could land them a fine
Employers should beware of changes to the Job Retention Scheme to avoid inadvertently finding themselves on the wrong side of HMRC, East Midlands Chamber’s HR expert has warned.
Director of resources Lucy Robinson has highlighted amended terms by the Government to the scheme, which now prevents employers from being able to claim for furlough pay during a notice period served by a departing member of staff.
The changes affect any claim periods since 1 December, which could require businesses to check back through their accounts so they don’t end up being ordered by HMRC to pay a refund on furlough cash.
She said: “Due to these changes, it’s really important for businesses to fully understand they can no longer claim on the Job Retention Scheme for pay during notice periods.
“This doesn’t just include employees who have been made redundant, but also for anyone serving notice of resignation or retirement.
“Business owners should speak to whoever is responsible for payroll or accounts to ensure they don’t have a back-claim issue as it could ultimately result in a fine from HMRC for a false furlough claim.
“Chamber members can also seek support via the free ChamberHR service.”
Furlough flexibility for parents welcomed
However, there is more positive news when it comes to the flexibility of the Job Retention Scheme.
Lucy said many organisations have asked whether someone can request to be furloughed due to childcare pressures, even if there is sufficient workload available for their business.
“The answer is yes the employee can ask for the right to be furloughed,” said Lucy.
“However, the business is able to turn down a request. More commonly, though, we’re seeing organisations coming to an agreement with the employee for part-time furlough, or even altering working hours to enable some homeschooling to take place during the day.”
Mixed messaging – including scrapping Job Retention Bonus – is causing confusion for businesses
This isn’t the only recent furlough-related change made by the Government.
The Job Retention Bonus, which offered a £1,000 one-off payment per eligible employee to firms that retained previously-furloughed staff until the end of January 2021, was scrapped in November when Chancellor Rishi Sunak confirmed the extension of the Job Retention Scheme, which is now in place until the end of April.
Lucy added: “While the changes are there to support employees, constantly making sudden alterations to the terms and incentives available to employers is having an impact on businesses.
“We already know that cashflow is one of the most pressing issues facing businesses – it reduced for the majority of firms in every quarter throughout 2020, as our Quarterly Economic Surveys reported – and many companies that have put a large number of workers on furlough will have been relying on the Job Retention Bonus to ease these cashflow worries.
“We understand the Government must make frequent reviews of its coronavirus policies but it must be careful not to disrupt business planning as a result.”
For more information on the changes to the Job Retention Scheme regarding notice pay, click here. The relevant section is under the subheading “If you’ve made your employees redundant”.
The ChamberHR service, run in partnership with Quest, provides free access to a 24/7 helpline at 01455 852037 and a free database of useful HR resources at www.chamberhr.co.uk.Back