HMRC has updated its guidance for employers on making claims under the Coronavirus Job Retention Scheme (CJRS) to reflect changes to the furlough scheme from 1 July, including flexible working
The first time employers will be able to make claims for days in July will be 1 July, and they cannot claim for periods in July before this point.
The guidance states that 31 July is the last day that employers can submit claims for periods ending on or before 30 June.
From 1 July, employers can bring furloughed employees back to work flexibly and part time, for any amount of time and any work pattern, while still being able to claim the grant for the hours not worked.
From this date, only employees that for whom employers have successfully claimed a previous grant for will be eligible for more grants under the scheme.
This means they must have previously been furloughed for at least three consecutive weeks taking place any time between 1 March and 30 June 2020.
For the minimum three consecutive week period to be completed by 30 June, the last day an employee could have started furlough for the first time was 10 June.
This may differ if employers have an employee returning from statutory paternal leave, for which the regulations are different.
For employees that meet the published criteria, the number of employees an employer can claim for in any single claim period starting from 1 July cannot exceed the maximum number of employees that employer claimed for under any claim ending by 30 June.
HMRC gives as an example, an employer who had previously submitted three claims between 1 March and 30 June, in which the total number employees furloughed in each respective claim was 30, 20 and 50 employees. Then the maximum number of employees that employer could furlough in any single claim starting on or after 1 July would be 50.
In addition, from 1 July, employers can bring employees back to work for any amount of time, and any work pattern. If this is the case, employers must work out the employee’s usual and furloughed hours before they start calculating their claim.
From 1 August, the level of the grant will be slowly reduced. No grant will be available for Class 1 employer NICs or pension contributions from 1 August although these contributions will remain payable by the employer.
From 1 September, employers will also be asked to contribute towards the cost of furloughed employees’ wages to ensure they continue to receive at least 80% of their wages for the time they’re on furlough.
Employers will still need to pay employer National Insurance and pension contributions on furloughed employees’ pay. For claims ending before 1 August, they can claim for these costs too.
Kate Palmer, associate director of advisory at Peninsula, said: ‘Employers will welcome the guidance on flexible furlough that was released late on the evening of Friday 12 June, though possibly not the format it was provided in.
‘Amendments to several different documents, and further newly created ones, made it difficult to track what is actually changing and how.
‘However, the guidance gives us more of an idea of how employers will be able to furlough employees flexibly from 1 July 2020.
‘It seems as though the system is indeed more flexible than the original rules with the minimum three-week period of furlough being removed; the new scheme allows flexible furlough to last for any amount of time. However, employers will need to be aware that the minimum claim period allowed is seven calendar days.’
However, Palmer cautioned that employers need to recognise that the support scheme is being wound down.
‘The second “phase” of the CJRS is a marker for its gradual conclusion, which is expected at the end of October 2020.
‘While some employers will be relieved that they are now permitted to meet growing demands from their customer base with a mixture of furlough, work and financial assistance from the government, the new scheme will not offer help to those who cannot yet open.
‘Coupled with the introduction of employer contributions to wage costs, the impending end of the scheme will not be good news for all,’ she said.
Commenting on the new category of flexible furloughed employees, RMS warned that those who have had employees rolling on and off furlough leave so far should beware as the number of furloughed employees an employer can claim for in any single claim period starting from 1 July cannot exceed the maximum number of employees the employer claimed for under any one claim ending by 30 June.
Carolyn Brown, employment legal partner at RSM said: ‘This is likely to preclude employers spreading the available work on a flexible furloughed basis across as many of its previously furloughed employees as might work operationally over the remainder of the scheme period to keep them closely involved in the business and support reopening.
‘Instead we are likely to see staff who are fully furloughed in rotation month by month.’
Susan Ball, employer solutions partner at RSM said: ‘There is a short window of opportunity for employers of weekly paid staff to weigh the benefits for future flexible furloughing of staff by saving up their weekly paid staff claims to make one higher numbers composite claim at the end of June against the cashflow challenges that the resulting delay in receipt of grant claim funds may bring to its business.’
By Pat Sweet