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What Happens At The End Of Furlough?

Gary Green
Gary Green
May 11, 2020

Although the scheme is due to run for at least 3 months, it's worth planning now for the end of furlough.

At the end of furlough, you'll need to make sure that you bring staff back to work in the proper way. We'll summarise the main points in this article, but you should check the HMRC page on the furlough scheme for all the details.

You may find our article Frequently Asked Questions About Furlough useful. And if you’d like more information about the financial, political and tax changes so far, check out our Coronavirus Tips. And be sure to visit our Coronavirus Update page.

Claims & Payments

Remember that the furlough scheme works in arrears. You continue to pay staff as normal through PAYE payroll. You then claim for the grant afterwards.

If you are having cash flow problems, you are still not supposed to wait until the end of furlough to pay staff. You should continue to pay staff and look for help through one of the government's other Coronavirus Financial Support schemes.

You can only submit one claim every 3 weeks. This is because 3 weeks represents the minimum period you can furlough a member of staff for. As we explained in our article How Do You Furlough Employees you can backdate claims to the 1st of March. You would obviously have to show that the employee hadn't been working for you since that date.

Bringing Staff Back... If You Can

The purpose of the Coronavirus Job Retention Scheme was to offer an alternative to redundancy. It would apply to staff who would otherwise have been made (or at risk of being made) redundant. Instead they would be placed on furlough until business picked up.

So the theory is that furloughed staff should be brought back when the scheme ends (ideally earlier). Rather than having to recruit and train a brand new workforce, you simply bring back furloughed staff and start working immediately.

Of course if the scheme ends and your business is still struggling, you may not be able to bring everyone back. At this stage you will have to consider redundancies. Of course, the usual employment law protections will still apply, so tread carefully.

Some other countries have similar furlough schemes with provisions making it difficult to make furloughed staff redundant. At the moment, this isn't the case with the UK scheme. But check with your HR department or an employment law specialist if you want to make absolutely sure.

Compliance Is Key

It's important to make sure that, when the process ends, you can prove you have been compliant. This means following the rules and keeping clear records of staff, dates and communication.

The government has been clear that it retains the right to audit all furlough scheme claims. This presumably gives it the ability to claw back any payments made if it looks like the business has been abusing the rules.

At the moment the rules around furlough and its alternatives are changing daily. We'll have more information as soon as it becomes available. Be sure to check our blog for updates.

If you'd like to discuss your options during the coronavirus crisis, please get in touch. We are staying on top of all the announcements from the government and can help you navigate this challenging time.

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