Flexible Furlough Scheme
It's Monday afternoon and this bulletin might just save you hours and hours of time searching for the various new and updated CJRS rules that came out last night. HMRC has released details of the new flexible furlough scheme, which starts on 1 July 2020, so here goes....
Under the new flexible furlough scheme, employees can work for some of the week and be furloughed for the rest, as agreed between employee and employer.
The most significant change is that the minimum three week period for furlough has been removed (as of 1 July 2020). There is no minimum period, although any claim through the CJRS portal must be in respect of a minimum one week period (i.e employers can only put in four claims a month, not 31).
The way the information was released was by making changes to most of the existing guidance, and by issuing three new pieces of guidance. It's not pretty, but here’s a summary of the new guidance (with links to the relevant part):
(1) Check if you can claim (original employer guidance doc - now version 14) -UPDATED
(2) Check which employees you can put on furlough guidance doc -UPDATED
(3) Steps to take before calculating your claim using the CJRS –NEW
(4) Calculate how much you should claim –NEW
(5) Claim for your employees' wages online –UPDATED
(6) Report a payment in PAYE RTI –UPDATED
(7) Part-furlough worked example –NEW
(8) Long list of worked examples –UPDATED
So, from 1 July, employers will claim a pro rata'd amount of 80% of salary, based on the proportion of hours not worked out of normal working hours. 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.
As CJRS begins to taper to an end on 31 October, is less generous and goodness knows is more complex, many employers will be considering redundancies. It's critical that employers consult fairly with employees whether through large scale job losses (20+ or 100+) or smaller numbers. We're going to send out a useful guide next week but employers would be wise to take advice at the planning stage.
If you need support, please get in touch. We can 'hand-hold' from the wings and/or provide on-site assistance.
Finally, this is a useful summary of the forthcoming changes.