Sentient Group Ltd
 
Info Update 2020/35                                                       Issue Date: 15/06/2020
 
Coronavirus Job Retention Scheme (CJRS)
Changes From 1 July 2020 – Flexible Furlough Scheme (FFS)
 
As promised the government produced updated guidelines on Friday 12 June, explaining how the CJRS will change in the coming months.

From 1 July, employers can bring furloughed employees back to work for any amount of time and any work pattern, while still being able to claim 80% of salary on a pro rata basis based on the proportion of normal working hours not worked.

A simple example – Your employee works a 40-hour week and earns £2,000 a month - on furlough with no top up they would receive £1,600 a month. You bring the employee back to work for 10 hours a week, (a quarter of their normal working time) so you would pay them £500 a month for the work they carried out; and furlough them for 30 hours a week, so the monthly furlough pay would be £1,200 (£1500 x 80%). Total pay would be £1,700
Alternatively: https://www.gov.uk/government/publications/find-examples-to-help-you-work-out-80-of-your-employees-wages/example-of-a-full-calculation-for-an-employee-who-is-flexibly-furloughed
You will recall that from August the amounts you will be able to claim will reduce as follows:
  • In August, the government will pay 80% of wages up to a cap of £2,500 and employers will pay ER NICs and pension contributions for the hours the employee does not work.
  • In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
  • In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. The cap will be proportional to the hours not worked.
Who can I claim for now?
As we have previously advised, you can only claim a further grant for a furloughed employee if:
  • they have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March and 30 June 2020. For the minimum 3 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.
  • a UK PAYE scheme started on or before 19 March 2020.
  • you submitted a report under the Real Time Information (RTI) reporting system for that employee on or before 19 March 2020.
  • you have a UK bank account.

Employees you wish to furlough from 1 July must meet the above criteria. The maximum number you can claim for in any single claim period commencing 1 July, cannot exceed the maximum number of employees you claimed for under any claim ending by 30 June. For example, if you had previously made a claim for 20 employees and a further claim for 30 different employees, the maximum number you will be able to claim for is 50 employees after 1 July.

There is an exception to this rule (isn’t there always): you can furlough an employee returning from statutory parental leave after 10 June even if you are furloughing them for the first time. You may do this provided that:
  • you have previously submitted a claim for any other employee in your organisation in relation to a furlough period of at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June.
  • the employee you wish to furlough for the first-time started maternity, shared parental, adoption, paternity and parental bereavement leave before 10 June and has returned from that leave after 10 June.
  • the employee was on your PAYE payroll on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.

How do I calculate normal working hours for my employee?
To calculate the normal working hours for those with fixed hours/pay, you simply take the number of hours worked in the pay period before 19 March 2020. To calculate the normal working hours for those with variable pay, you take the higher of (a) the average number of hours worked in the tax year 2019 to 2020 or (b) the corresponding calendar period in the tax year 2019 to 2020.

What is the minimum furlough period?
Prior to 1 July, any employees placed on furlough must be furloughed for a minimum of 3 consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed more than once, but they must be furloughed for a minimum of 3 consecutive weeks each time they are furloughed.

From 1 July, agreed flexible furlough agreements can last any amount of time and employees can enter into a flexible furlough agreement more than once.

Where a previously furloughed employee starts a new furlough period before 1 July this furlough period must be for a minimum of 3 consecutive weeks. This is the case regardless of whether the 3 consecutive week minimum period ends before or after 1 July.

The guidance provides an example here - a previously furloughed employee can start a new furlough period on 22 June which would have to continue for at least 3 consecutive weeks ending on or after 12 July. After this, the employee can then be flexibly furloughed for any period. However, after 1 July, employers cannot make claims that cross calendar months, so the employer will need to make a separate claim for the period up to 30 June.

Although flexible furlough agreements can last any amount of time, unless otherwise specified, the period that you claim for must be for a minimum claim period of 7 calendar days.

Making a claim
The rules around making a claim are also changing. If your claim ends on or before 30 June 2020 there is no maximum length of period being claimed for; but any claim for a furlough period that began before 1 July must end on or before 30 June (even if the employee will be furloughed into July).
 
In other words, you will need to submit a claim for the period up to 30 June which must be submitted before 31 July 2020. A new claim will need to be submitted for the period commencing 1 July.

Keeping up?

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 are claiming for the first few days or the last few days in a month. You can only claim for a period of fewer than 7 days if the period you are claiming for includes either the first or last day of the calendar month, and you have already claimed for the period ending immediately before it.

We know it is complicated but you can see the full guidance here 
 
 
 
The advice and comment in this update is not meant to be an authoritative statement of the law. The articles and summaries should not be applied to any specific set of facts and circumstances without seeking further advice. Whilst every care is taken to ensure that the content is correct Sentient cannot accept responsibility for the accuracy of statements made nor the result of any actions taken by individuals after reading such.
 
 
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Ilkley Road
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