Late on Friday night, the details of how the new Flexible Furlough Scheme which starts on 1 July were released by HMRC. This is now the 14th update to furlough scheme following its launch in March. You can find the current version here.

The main changes are:

  • Furloughed employees can work for you from 1 July, under the flexible furlough scheme. In addition, working you in any scenario whilst furloughed was previously prohibited. They must be paid for all hours worked directly by you in the usual way. They MUST not work for you during their remaining unworked and furloughed hours.
  • The 3-week minimum furlough period will no longer apply after 1 July; you can agree what hours employees will work and on what shift pattern, on a week by week basis. This is extremely helpful for you in terms of workforce planning.
  • You must keep a record of the new agreement of varied hours and a record of all hours worked and furloughed. We would recommend keeping these documents for up to 6 years. This can be stored in your HR files or our Breathe HR software. The guidance states that agreements should be not only in line with employment law but also equality and discrimination legislation; there is therefore a clear requirement for employers to think about how the flexible furloughed arrangements might impact working parents, pregnant women and people with disabilities.
  • It confirmed the previous points on holiday (this wasn’t in this guidance before); as a reminder, you need to pay in full if employees take holiday during furlough and that you can ask them to take leave provided you give them the prescribed notice. The notice is double the amount of the holiday – for example, if you want employees to take 5 days annual leave you must give them 10 days’ notice.
  • If employees are returning from parental leave, the deadline of 10 June to enter the scheme does not apply and they can still be furloughed when that leave ends

Updates had also been made to the guidance on how to claim for your employees’ wages online:

This sets out what additional information you need when making a claim online under the Flexible Furlough Scheme. Furthermore, this include:

  • The number of usual hours would work in the claim period;
  • Number of hours your employee will work in the claim period;
  • The number of furloughed hours your employee has been furloughed in the claim period.

It also addresses what to do if you make an error when making claims. It specifically states that you must repay any overpayments back to HMRC.

New Guidance

Steps to take before calculating your claim using the CJRS:

  • You need to decide the length of your claim period but its suggested that you match this with payroll dates;
  • Work out what to include when calculating wages (the rules haven’t changed on this);
  • Work out your employees’ usual and furloughed hours. You need to assess if they are on fixed or variable hours and you need to know their exact hours before claiming; there are some workable examples in the guidance which are really helpful;
  • Remember, the scheme rules will change each month so you have to claim for each month separately – claim periods cannot overlap;
  • Employees coming back from sick leave or family related leave should be calculated on their normal pay before that leave, not their pay whilst they were on leave.

NOTE – if your employees are remaining on full furlough and you don’t intend to bring them back to work, you just need to work out the maximum amount which you are claiming for.

Calculate how much you should claim:

  • Recording requirements – keep all records for 6 years;
  • Once you know the usual hours you can use the calculator (your Payroll team/provider should be able to help with this);
  • Shows you how to work out the maximum wage amount and how to calculate NICs, pensions and hours in a bit more detail with worked examples.

Part-furlough worked example – sets out some worked examples for you to give some context on how to calculate flexible furlough claims.

We would recommend speaking to your payroll provider or your accountant for further support on how to calculate furlough, if you are unsure.

Reminder on payments including NI and Pensions

Remember, from 1 August, you will need to start paying the employer’s national insurance and pension contributions.

From 1 September:

  • Employers will continue paying the employer’s national insurance and pension contributions
  • The government will pay 70% of wages
  • Employers will need to top up to 80% or more, depending on what’s been agreed with the employee

From 1 October:

  • Employers will continue paying the employer’s national insurance and pension contributions
  • The government’s contribution to wages will go down to 60%
  • Employers will need to top up to 80% or more, depending on what’s been agreed with the employee

The furlough scheme will close on 31 October 2020.

If you have any questions, please contact us at and we’ll be happy to help.

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