Over the weekend HMRC released details of the flexible furlough scheme which starts on 1 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. The employer and the employee can agree the proportions between themselves and can adjust these as required by the needs of the business.
The update was released by HMRC updating most of the existing guidance and by issuing three new pieces of guidance. It is rather horrible and convoluted! The guidance can be found here. There are six in total. Unfortunately, you will need to read it all before making your claim.
The most significant changes are:
- You can flexibly furlough anyone who you have furloughed for at least three consecutive weeks between 1 March and 30 June and for whom you have made a successful claim on CJRS
- As we already knew the last day to furlough someone for the first time was 10 June
- The number of employees you can flexibly furlough cannot exceed the maximum number of employees you have claimed for previously (i.e. if in March you furloughed 20 people, April 30 people, May 25 people and June 20 people, then most you can claim for in any one period is 30)
- You must have agreed with the employee that they will be furloughed and have confirmed that agreement in writing (the employee does not have to sign the agreement)
- The minimum period of flexible furlough is now seven days, not three weeks as previously.
- You cannot make a claim which straddles months. For example, week commencing 29 June, you must split your claim for June and for July.
- You must retain your records for at least six years, not five years as previously.
- You must pay your employee their normal pay for the hours worked and keep full records of all hours undertaken (not necessarily easy if they are working from home). You can then claim the balance of their normal working hours from CJRS at the relevant CJRS rates
- The CJRS rates will reduce: from 1 August employees will still receive 80% but you will have to pay NICs and pension contributions; from 1 September employees will still receive 80% but CJRS will pay 70% and you will pay 10%; from 1 October employees will still receive 80% but CJRS will pay 60% and you will pay 20%. This will apply for all non-worked hours
- The scheme will end on 31 October.
There is plenty more covering different working patterns, zero hours staff etc. HMRC has provided a worked example of a claim which is here.
The system is now very much more complex and with businesses now having to pay for the privilege of furloughing staff, the future needs of the business and the question of whether restructures and redundancies are necessary will very much be in the minds of employers across the country.
For more information on the scheme or the impact on your staffing, please contact our Employment Team on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.