December 18, 2020

Claiming furlough for staff & Christmas

business budget planning

With the ever changing situation, regarding coronavirus, HMRC have been updating their online guidance documents regularly. We wanted to bring your attention to a recent update to do with furloughed staff and Christmas.

The main HMRC document we are going to discuss is this one:

The change regards the ‘Holiday pay’ section of the guide and concerns the fact that some employers could, theoretically, furlough staff that would have been on holiday anyway, including over the Christmas period.

This meant that employers could claim the furlough grant (up to a maximum of £2500 per month) for each furloughed staff member whilst the same staff would be on annual leave.

Previously the HMRC guidance stated that employees should not be furloughed just because they are on holiday, but now with this recent update, Christmas is explicitly included in that guidance.

The 3 key points regarding this matter are summarised below:

  1. Furloughed employees continue to accrue leave as per their employment contract.
  2.  You can only place employees on furlough if coronavirus (COVID-19) is affecting your operations.
  3. You should not place employees on furlough just because they are going to be on paid leave or you usually do less business over the festive period.

HMRC have indicated that they will be checking any increase in claims over the Christmas period. They will also be publishing details of employers claiming furlough from December onwards.