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HMRC: no flexibility on new employee furlough

09 November 2020 by
HMRC: no flexibility on new employee furlough

Employees who changed jobs during October and were not included on their new company's PAYE Real Time Information (RTI) system until the last day of the month will not be able to access the government's extended furlough scheme.

Hospitality operators have voiced their concern that as a result newly employed staff are going to be left with no income support.

For employees to be eligible for the furlough payment, equal to 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month, the employer must have made a RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for the employee.

However, many companies do not make their RTI submission until the last day of the month or first day of the next month, meaning that many employees will miss out on furlough payments by a matter of hours.

Chantelle Nicholson, chef-owner of Tredwells in London's Covent Garden, who opened All's Well pop-up restaurant in Hackney just a week before the second lockdown, told The Caterer that she has two new team members who will not be able to benefit from the scheme.

Chantelle Nicholson
Chantelle Nicholson

She said: "One officially finishes his job [for a large group] on 11 November [as had holiday accrued]. He worked for them for almost three years and they have said he will only receive furlough from 1 to 11 November.

"The other employee has been told by her [former] employer she can remain on their furlough scheme but they have contacted me and said they will only do this if I pay the National Insurance (NI) and pension contributions. She had worked for them for at least two years and it is a smaller group of restaurants, but I was a bit shocked!"

Nicholson said she hope that HMRC would consider calculating the furlough payment for staff who have been included within their employer's RTI submission from 5 November, the date of the start of the lockdown.

"It is hugely disappointing and terrible for the staff involved," she added.

Clarrie O'Callaghan, owner of the 50-seat Rattle Owl restaurant in York, is concerned what will happen to employees who don't fit the criteria if restaurants are not able to open again after the current 28-day lockdown period.

"I have one new member of staff who joined us on 4 October, but I didn't submit the RTI form until 8.35am on 31 October, so they missed out on being furloughed by just over eight and a half hours," she said.

"I can understand that the government has set a deadline in order to protect against fraud, but I can show proof via our payroll accounting system that the person concerned was on our books from the beginning of the month."

UKHospitality said it was unlikely that the government would budge on the eligibility date for furlough as changing it would "significantly expose the scheme to potential fraud".

A spokesperson for HMRC confirmed that this was the case. "The employee being claimed for has to be on a RTI submission on 30 October or beforehand, or they won't be eligible," he said.

New employees who have missed out on furlough via their new employer can be re-employed by their former company, as long as they were on the payroll of that business on 23 September 2020 and a RTI submission was made to HMRC for that employee between 20 March and 23 September.

"Whichever business is employing the person and has them on their PAYE scheme, they are ultimately liable for their NICs and pension contributions," added the HMRC spokesperson.

"If the two businesses want to form their own agreement on the matter, then that's up to them. But ultimately it's the company actually furloughing the person that is liable for the NI and pension contributions."

Photo: Shutterstock

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