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Flexible Furlough Scheme – 1st July 2020

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Flexible Furlough Scheme – 1st July 2020

There are changes being made to the furlough scheme with effect from 1st July and that means that if you are an employer you need to be aware of how you can bring staff back to work and claim the furloughed grant for the hours they do not work. Let’s take a look at the changes.

Which employees can employers claim for from 1 July?

From 1 July you will only be able to claim the grant for employees who have already been furloughed for three consecutive weeks between 1 March and 30 June 2020.  Therefore, the last date an employee could have started furlough for the first time was 10 June 2020. Having said this HMRC have now confirmed that if you were to furlough someone today then you could start to claim under the second scheme after 3 weeks later.

HMRC have also confirmed a few exceptions whereby employees who have returned from maternity, shared parental, adoption, paternity or parental bereavement leave or if they were a reservist after 10 June can be furloughed after 10 June provided that:

  • the employer has previously submitted a CJRS claim for another employee in the organisation between 1 March and 30 June 2020;
  • the employee is being furloughed for the first time;
  • the employee started their Shared Parental Leave before 10 June and returned from that leave after 10 June 2020; and
  • the employee was on the employer’s PAYE payroll on or before 19 March 2020.

The maximum number of employees that can be claimed for in each claim period

From 1 July, the number of employees that employers can claim for in any single claim period cannot exceed the maximum number of employees that the employer claimed for under any claims ending by 30 June. This means that if in a previous claim your maximum number of employees was 7 you will not be able to claim for more than this number. This is particularly important if you are choosing to bring staff back on a flexible furlough basis but revolve staff numbers.

When calculating the maximum number of employees that employers can claim for, the number of employees being furloughed for the first time due to them returning from Shared Parental Leave should be added to any previous maximum.

Flexible furlough

From 1 July employers will be able to “flexibly furlough” their employees. This means you can bring your employees back to work for any amount of time and on any work pattern. Employers will be able to claim a grant for the hours which flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period.

If an employer wishes to flexibly furlough staff, they will need to obtain their employees’ agreement and keep a written agreement that confirms the new furlough arrangement. This agreement must be kept for 5 years to satisfy employment law and HMRC compliance checks. Employers must also keep records of how many hours their employees work and the numbers of furloughed hours for 6 years.  

It’s also worth remembering that if employees do any sort of training or take holiday during a period of furlough then you must uplift the pay for that period to 100% and that the new minimum wage amounts will apply.

Claim periods

The new guidance set out by HMRC provides detailed information for employers on how to decide the length of the claim period but here are a few key points.  

  • Claims for any periods starting before 1 July must end on or before 30 June, even where an employee is furloughed continuously. Separate claims will need to be submitted to cover the days in June and the days in July.
  • The latest that employers can submit claims for furlough periods ending on or before 30 June is 31 July.
  • The earliest that employers will be able to submit claims for furlough periods commencing in July will be 1 July.
  • Claim periods starting on or after 1 July must start and end within the same calendar month and must last at least 7 days unless an employer is claiming for the first few days or the last few days in a month.
  • Employers can only make one claim for any period, so they must include all furloughed or flexibly furloughed employees in one claim.
  • When claiming for flexibly furloughed employees, employers should not claim until they are sure of the exact number of hours they will have worked during the claim period. If employers claim in advance and the employee works more hours, then the employer will have to pay back some of the grant to HMRC.

How you will need to work out an employees usual hours and furloughed hours

If employers flexibly furlough their employees, they will need to calculate their employees’ “usual hours” and record the actual hours that they work as well as their furloughed hours for each claim period.

If an employee is not contracted to a fixed number of hours or their pay depends on the number of hours they work, employers will need to work out their employees’ “usual hours”. The HMRC guidance sets out how to do this.

HMRC has provided an example of how to calculate the amount that employers should claim for an employee who is flexibly furloughed as well as new guidance on how to calculate how much employers can claim using the CJRS. It is exceptionally complicated as you will see !

If you have any specific questions on the amended scheme and how it may affect you and your staff simply get in touch.

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