Flexible Furlough – The New Rules

16 June 2020 - Elizabeth O'Hanlon

Late on Friday evening, the government released a series of documents giving further guidance on the flexible furlough scheme. Here is a summary of the main changes to answer key questions you may have.

Flexible furlough

As lockdown restrictions have started to ease, the government has introduced more flexibility to the furlough scheme to help businesses increase capacity once more. You now have the option to bring furloughed employees back to work for an amount of time or work pattern to support your business – but you’ll need to agree this in a new written agreement with your employees and your records and calculations must be kept for at least 5 years.

Who can be furloughed?

The furlough scheme closed to new members on 10 June, so as long as your employee was furloughed, for a minimum of 3 weeks at any time before 30 June they are able to be put onto the flexible furlough system. An important thing to bear in mind is that you cannot put more employees on to the scheme than your maximum claim up to the 30 June. So for example, if  your business made three furlough claims between 1 April and 30 June claiming for 50 people in April, 40 in May, and 20 employees in June, the maximum number of employees you can furlough under the flexible furlough scheme from 1 July 2020 is 50 and each person must have been furloughed for 3 weeks before 30 June 2020.

How do I calculate my claim?

As an employer you’ll pay the normal rate of pay for the hours worked by your staff once they are back in part time work. For the time these employees are not working, they can be furloughed, and you can claim a grant to cover these hours unworked hours via the new flexible furlough portal.

  • June & July: will continue in the same way, the government continues to pay 80% of the wage bill for furloughed workers, (up to £2,500) as well as the Employers National Insurance (NI) and employers pension contributions. Note: from July, the new flexible furlough scheme will mean you will have to pay your employees for the hours they work.
  • August: employers start to share the cost of the scheme by being unable to claim back the Employers National Insurance and pension costs which amounts to an average of 5% of the gross employment costs of these employees. The government continues to reimburse 80% of the wages of furloughed employees which must be paid to them
  • September: employers now need to pay 10% of furloughed workers’ wages, (plus NI and pension costs). The government will pay the remaining 70% up to a cap of £2187.50 per month. The employee must still receive 80% of their pay when furloughed.
  • October: the government’s contribution will taper to 60% of the wages for those being furloughed up to a cap of £1,875. Employers therefore need to pay 20% of their furlough salaries (plus NI and pension costs), to bring the wages for those workers up to 80% of their usual pay. The chancellor has said this represents 23% of the gross employment costs for an employer, had that employee not been furloughed.

The caps mentioned above are prorated for the number of days an employee is furloughed in a claim period.

Frequently Asked Questions

  • 1. My employee hasn’t been furloughed can I claim?

    No, unfortunately, the 10 June was the last date for putting your employees on furlough for a minimum of a 3 week period in order to qualify to make a claim via the flexible furlough scheme.

  • 2. Can I put my entire team on furlough?

    Only if all of your team were on furlough together at one point during this period. So for example, if  you made three furlough claims between 1 April and 30 June, and you claimed for 50 in April, 40 in May, and 20 employees in June, and you have 100 staff, you can only put a maximum of 50 employees on the flexible furlough scheme at the same time.

  • 3. Can an employee go on and off flexible furlough like they could in the previous furlough scheme?

    Yes. Unlike the period to 30 June 2020 where an employee had to be furloughed for a minimum of 3 weeks, from 1 July 2020 there is no minimum furlough period.

  • 4. I have an employee who is coming back from a period of parental leave, can they be furloughed even though we missed the 10 June deadline?

    Yes, statutory leave such as maternity, paternity or adoption leave is an exception to the rules mentioned above, as long as they were on leave before 10 June and were on your payroll in March and you have already furloughed other employees.

  • 5. How do I make a claim?

    You’ll need to submit the information to HMRC via the furloughing portal in the same way that you have for previous months. From 1 July 2020 the minimum claim period is 7 days.

  • 6. Can my accountant submit my claim on my behalf?

    Yes, your accountant can make a claim submission on your behalf as long as they have been authorised to act for you for PAYE online purposes.

  • 7. When can I make a claim?

    You can make a claim up to 14 days before your claim period end date. We would suggest that you match your claim period to the dates you run your payroll if possible. Note:  your claim period must not overlap with the previous claim period. From 1 July, claims must be made in calendar months and cannot straddle 2 months, due to the fact that the amounts claimed reduce each month. For example, if you have a monthly payroll that covers the period from 15 June to 14 July, you would need to do a claim for the period from 15 June to 30 June and a second for 1 July to 14 July.

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