On 12 June guidance was published by HMRC on the changes to the Coronavirus Job Retention Scheme or furlough leave, as well as details of how flexible furlough will work.
Only employers who have already furloughed staff will be able to use the scheme from this date, with numbers who can be furloughed limited to the maximum number already claimed for in an earlier claim period.
To be eligible after 1 July, employees must already have been furloughed for the minimum period of three weeks at any point between 1 March and 30 June. This means the deadline for furloughing staff for the first time was 10 June. This deadline won’t however apply to staff who started a period of family leave before 10 June and return subsequently, though their employer must have furloughed at least some staff by 10 June.
Businesses will be able to place employees on ‘flexible furlough’ from 1 July, on any pattern of hours or shifts and claim for unworked time under the furlough scheme.
The minimum three week furlough period will no longer apply, but claims must be for a minimum of one week and claims must not overlap months.
Employers must keep detailed records of flexible furlough, including how they calculated what time is worked and what time is furlough leave. This will be by reference to employees’ usual hours, using a calculation based on whether employees have fixed or variable hours.
The updated guides include worked examples, but the process is complex. Any time actually worked must be paid at the employees’ usual contractual rate.
Furlough time will be at the 80% rate until the scheme ends on 31 October, but government support will be tapered as follows:
From 1 August, employers will have to pay employer NICs and auto-enrolment pension contributions, with the government continuing to pay 80% of wages up to the £2,500 cap.
- From 1 September, employers will also have to pay 10% of wages, with the government paying 70% (capped at £2,187.50).
- From 1 October, employers will have to pay 20% of wages, with the government paying 60% (capped at £1,875).
The complexity of the scheme means that it's worth taking professional advice if you have any queries on your specific situation.
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