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30th November 2020

Updates to HMRC furlough guidance for employers and further Treasury Direction

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As mentioned in the October 2020 update, the government has extended the Coronavirus Job Retention Scheme (CJRS) in light of England’s second lockdown which began on 5 November 2020. The Chancellor has since announced that the CJRS will officially be extended until 31 March 2021, despite original plans to end it in 2020. 

On 13 November 2020, the latest Treasury Direction (TD) on the CJRS was published along with further updates to the government guidance on the CJRS.  The new TD only sets out how the CJRS will operate until 31 January 2021 at which point a further TD will be published covering how the scheme will operate for the remaining 2 months.  The new TD and updated guidance largely confirm what we already knew about the CJRS extension as summarised in our October 2020 update, with a few important additions.  Below we set out some of the most important points for employers:

  1. Notice Periods: under the CJRS it had been previously confirmed that an employer was allowed to claim for employees serving contractual or statutory notice. The most significant point introduced by the latest TD and guidance is that employers cannot claim for any days between 1 December 2020 and 31 January 2021 during which the furloughed employee is serving a contractual or statutory notice period (this includes for retirement or resignation).

  2. TUPE: for claim periods after 1 November 2020, a new employer is eligible to claim in respect of the employees of a previous business transferred if the TUPE or PAYE business succession rules apply to the change in ownership. The employees being claimed for must have transferred to the new employer on or after 1 September 2020 and have been employed by either their old employer or new employer on 30 October 2020. 

  3. Deadline for submitting and amending claims: the following deadlines apply to claim submissions and any amendments (subject to HMRC’s discretion to extend the deadline where the employer has “reasonable excuse”):
  • claims in respect of November 2020 must be submitted by 14 December 2020 and amended by 29 December 2020;
  • claims in respect of December 2020 must be submitted by 14 January 2021 and amended by 28 January 2021; and
  • claims in respect of January 2021 must be submitted by 15 February 2021 and amended by 1 March 2021.

Employers will need to consider the impact of the furlough extension on their plans, baring in mind the notice point in particular, as this may affect planned redundancies.  For further advice please contact a member of the employment team.