Page Updated Saturday 13 June 2020
Coronavirus Job Retention Scheme – new flexible rules (effective 1st July)
On 29th May the government announced more information regarding the extension to the CJRS and the new flexible furloughing rules, with further details released on 12 June.
The Coronavirus Job Retention Scheme will close on 31 October 2020.
Flexible Furlough
From 1st July you will be able to bring previously furloughed employees back to work part time and the government will continue to pay 80% of their wages for the hours they aren’t working. Employees can be brought back to work for any amount of time and any shift pattern, while still being able to claim CJRS. This is a welcome change to the existing rules which currently state that furloughed employees can’t work at all and will assist businesses as they start to re-open.
Changes to working hours must cover a period of at least a week and be confirmed to your employee in writing. There are no minimum or maximum hours that they must work and there is no minimum time that you must furlough staff for.
From 1st July you will only be able to furlough staff who have previously been furloughed for a full three week period prior to the 30th June. Therefore, the final date that you can furlough an employee for the first time to take advantage of the new flexibilities will be the 10th June.
The number of staff you can claim for in any single claim period starting from 1 July cannot exceed the maximum number of employees you claimed for in claims ending by 30 June.
Funding from the government between now and the 31st October will be tapered as follows:
June and July – The government pays 80% of furloughed wages (up to maximum £2,500 per month) and reimburses employers NIC and employers pension. Employers will have to pay employees for the hours they work.
August – The government pays 80% of furloughed wages (up to £2,500 maximum). The employer must now cover the employers NIC and pension costs. Many small businesses will be able to cover their employers NIC costs by claiming employment allowance.
September – The government pays 70% of furloughed wages (up to maximum of £2,187.50 per month). The employer must cover 10% of wages, plus employers NIC and Pension.
October – The government pays 60% of furloughed wages (up to a maximum of £1,875). The employer must cover 20% of wages, plus employers NIC and Pension.
Claiming Flexible Furlough
If you flexibly furlough employees, you need to agree this with the employee and keep a new written agreement that confirms the new arrangements.
For the claim period you will need:
- The number of usual hours your employee would work in the claim period
- The number of hours your employee has or will work in the claim period
- A record of the number of furloughed hours your employee has been furloughed in a claim period
Length of Claim Period
The first time you can claim for furloughed days in July will be 1 July and the 31 July is the last day that you can submit claims for periods ending on or before 30 June.
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 you’re claiming for the first few days or last few days in a month. You can only claim for fewer than 7 days if the period includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it. Separate claims would need to be submitted to cover the days in June and the days in July that the employer is claiming for, even if the employee is furloughed continuously. This could mean that the claim period will differ from the pay period.
The claim period should be matched to the payroll processing dates if possible. As only one claim can be made for any period, all furloughed employees must be included in one claim even if they are paid at different times.
For employees who are flexibly furloughed a claim should only be made when there is certainty over the exact number of hours they will have worked during the claim period.
Claiming for those returning from parental leave
An employee can be furloughed if they are returning from statutory parental leave after 10 June even if they are being furloughed for the first time. This can be done provided that:
- A claim has previously been submitted for other employees in your organisation in relation to a furlough period of at least 3 consecutive weeks between 1 March 2020 and 30 June
- The employee being furloughed for the first time started their parental leave before 10 June and returned after 10 June
- The employee was on your PAYE payroll on or before 19 March 2020, with an RTI submission being made in respect of that employee on or before that date
The number of employees you are furloughing for the first time due to them returning from parental leave should be added to any previous maximum number you could claim for.
Claim Errors
If an error has been made in a claim that has resulted in an overclaimed amount, this must be paid back to HMRC.
HMRC can now be told about overclaimed amounts as part of the next claim. When making the claim you will be asked whether you need to adjust the amount down to take account of a previous error. The new claim amount will be reduced to reflect this.
For those who will not be submitting future claims, a payment must be made to HMRC using your 14 or 15 digit payment reference number that begins with X. HMRC must be contacted to obtain your reference number. Details of how to pay can be found using the following link: https://bit.ly/2BfNbhN
If an error has been made that has resulted in an underclaimed amount then you should contact HMRC and they will conduct additional checks.
When the Scheme Ends
When the Coronavirus Job Retention Scheme closes on October 31, employers must decide whether employees can return to their normal hours. If not, it may be necessary to consider reducing their hours or terminating employment (redundancy.) Normal redundancy rules apply to furloughed employees.
For more information on the current CJRS rules click here.
