Thousands more employees will now be eligible to receive support through the Government's Coronavirus Job Retention Scheme after the eligibility date was extended to March 19.
But the move won't help everyone and is unlikely to aid 200,000 employees, a figure predicted by official estimates from the UK Government.
Employers can now claim for furloughed employees who were employed and on their PAYE payroll on or before March 19 - the day before the scheme was announced.
Individuals originally had to be employed on February 28 2020 to qualify for the Coronavirus Job Retention Scheme.
Under the scheme, employers can claim a grant covering 80 per cent of the wages for a furloughed employee, up to £2,500 a month.
The extension means employers can now claim for furloughed employees that were on their PAYE payroll on or before March 19 – so those who have recently started a new job and weren't on the payroll by February 28, but were by March 19 will get help.
However, there's a technical caveat – it's likely you need to actually have been paid at least once by your employer by then. If you are paid weekly, you should be fine, but if you are paid monthly - especially at the end of the month, you may be affected.
This is because your employer needs to have made a payroll submission about you to HMRC on or before March 19.
Laura D’Arcy, employment law specialist and partner at commercial law firm BLM explains this further: “This is undoubtedly a positive move for many employees, especially those who may have previously ‘slipped through the net’ having started a new job after 28th February.
However, within the updated guidance from HMRC is a very important stipulation – businesses can only claim for furloughed employees that were included on their PAYE payroll on or before 19th March and were notified to HMRC on a Real Time Information (RTI) submission on or before 19th March.
“The RTI requirement is new – previously, HMRC had stated that employees simply needed to be on their employer’s PAYE payroll on 28th February. It is an important and very complex addition, which could impact those on a monthly wage in particular, rather than if paid weekly or fortnightly.
“It could in fact result in some people, who were previously eligible for the scheme, no longer qualifying for furlough.”
What is Real Time Information (RTI)?
RTI is how tax and other deductions under PAYE are notified to HMRC by an employer, each time an employee is paid.
How might RTI affect furloughed workers?
RTI submissions may not exist for employees submitted to payroll in late February, if their wages were not processed until the next month’s payroll, where that payroll falls towards the end of the month.
Some RTI submissions may therefore fall outside of 19th March which creates clear problems for businesses which operate a monthly payroll, especially those with new starters – which the change to the qualifying date was surely intended to account for.
Ms D’Arcy added that it's "an inconsistency that needs urgent attention.”
And went on to explain that “whilst some new employees may have been on a PAYE payroll on 28th February, they may not have been included in an RTI submission in February or before the 19th March cut-off, as their first paycheck was due at the end of March.
“This means that employees who were previously thought to be eligible might no longer qualify for furlough claims through their employer. There are also likely to be cases where new starters who were employed after 28th February are still not eligible, despite the extension to the qualifying date.”
Though HMRC and the Government are working tirelessly to ensure that as few people as possible fall within the cracks during the coronavirus pandemic, the RTI requirement is certain to cause confusion and problems for thousands of workers.
It also potentially leaves businesses facing criticism from staff, who will be understandably distressed to hear that they may not in fact qualify for the job retention scheme.
Money-saving expert Martin Lewis also discussed the new furlough cut-off date and the UK Government’s estimate that it will help a further 200,000 employees during his live coronavirus-special TV show on Thursday night telling viewers: “I’m somewhat skeptical of that number now that I’ve looked at the technicals.”
He asked people who work in payroll, via his Twitter account, how many days before the payroll date they do the RTI data and most responded saying they did it the week before.
“This means many people will have started on the 1st of March, but be paid on the 25th and they’re RTI data won’t have gone to HMRC, so it won’t help them,” he explained.
"However, the Treasury should be applauded for breaking with its initial stance and showing real flexibility. Sources there had been firm that it was very unlikely to change any of its initial announcements, only tweak guidance,” he added.
Commenting on the UK Government's application page for furloughing staff launching on Monday, Justin Basini, CEO at ClearScore, said: “The launch of businesses' applications to the Furlough Wage Scheme on Monday is critical in supporting organisations and their employees who find themselves in significant financial distress.
"But it's an application day, not a payout day. The individual will be negatively impacted if their employer cannot afford to pay them their salary pending government payouts."
