• David Parker

Flexible furlough and your business

Updated: an hour ago

On Friday night, HMRC released details of the flexible furlough scheme, which starts on 1st July 2020.


Under the flexible furlough scheme, employees no longer need to avoid doing any work for the employer, but can work for some of the week and be furloughed for the rest, in proportions decided between employee and employer. (You will need to put in place a new written ‘Flexible Furlough Agreement’ for any staff on the new scheme, as soon as I have one available, I will let you know.)


For any hours worked, you will pay 100% of salary, for any hours not worked you can claim the furloughed payment through the CRJS.


The most significant change is that the minimum three week period for furlough will be removed (as of 1st July 2020). There will be no minimum period, although any claim through the CJRS portal must be in respect of a minimum one week period (i.e. employers can only put in four claims a month, not 31).


The way the information was released was by making changes to most of the existing guidance, and by issuing three new pieces of guidance. Unfortunately it is not straightforward….


Below is a summary of the new guidance with the relevant links:


(1) Check if you can claim (original employer guidance doc - now version 14) - UPDATED (https://lnkd.in/eYzzGjz


(2) Check which employees you can put on furlough guidance doc - UPDATED (https://lnkd.in/evQs5Vx


(3) Steps to take before calculating your claim using the CJRS - NEW (https://lnkd.in/e5rzxcs


(4) Calculate how much you should claim - NEW (https://lnkd.in/eyP5rwJ


(5) Claim for your employees' wages online - UPDATED (https://lnkd.in/epPf9SU


(6) Report a payment in PAYE RTI - UPDATED (https://lnkd.in/eE8YxCQ


(7) Part-furlough worked example - NEW: (https://lnkd.in/eSBipD9


(8) Long list of worked examples - UPDATED (https://lnkd.in/ebxX9D9

Broadly, from 1st July 2020, employers will claim a pro rata'd amount of 80% of salary, based on the proportion of hours not worked out of normal working hours.


To calculate the normal working hours for those with fixed hours/pay, you simply take the number of hours worked in the pay period before 19 March 2020.


To calculate the normal working hours for those with variable pay, you take the higher of (a) the average number of hours worked in the tax year 2019 to 2020 or (b) the corresponding calendar period in the tax year 2019 to 2020.


Here's one of HMRC's worked examples of how to calculate furlough for a flexibly furloughed employee.


Finally, this is a useful summary of the forthcoming changes.


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