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30 June 2020

Getting Ready for Changes to the Furlough Scheme

Tax Tips – Business Question:

My business has been severely affected by Covid-19 and I have availed of the Coronavirus Job Retention Scheme (CJRS) for a large number of my employees. I am now starting to see a pick in orders and I would like to take some of my staff back to work. I have read about increased flexibility in the Furlough Scheme. Can you explain what these changes are?

‘In early June, the Government released a raft of further guidance concerning the CJRS  and the changes which will be implemented from 1 July 2020. The new and updated guidance sets out who will be eligible from 1 July 2020 and explains how “flexible furlough” will operate.’ says Managing Director Feargal McCormack

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From 1 July, employers will only be able to claim a grant for employees that have already been furloughed for three consecutive weeks between 1 March and 30 June 2020.  Therefore, the last date an employee could have started furlough for the first time was 10 June 2020.

From 1 July, the number of employees that employers can claim for in any single claim period cannot exceed the maximum number of employees that the employer claimed for under any claims ending by 30 June. For example, if an employer previously submitted three claims between 1 March and 30 June 2020, in which the total number of employees furloughed was 20, 30 and 50 employees respectively, the maximum number of employees that the employer can furlough in any single claim from 1 July 2020 will be 50.

From 1 July employers will be able to “flexibly furlough” their employees. This means employers can bring their employees back to work for any amount of time and on any work pattern. Employers will be able to claim a grant for the hours which flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period.

If an employer wishes to flexibly furlough staff, they will need to obtain their employees’ agreement and keep a written agreement that confirms the new furlough arrangement. This agreement must be kept for 5 years. Employers must also keep records of how many hours their employees work and the numbers of furloughed hours for 6 years.

There is new guidance for employers on how to decide the length of the claim period. Some of the key points are:

  • Claims for any periods starting before 1 July must end on or before 30 June, even where an employee is furloughed continuously. Separate claims will need to be submitted to cover the days in June and the days in July.
  • The latest that employers can submit claims for furlough periods ending on or before 30 June is 31 July.
  • The earliest that employers will be able to submit claims for furlough periods commencing in July will be 1 July.
  • 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 an employer is claiming for the first few days or the last few days in a month.
  • Employers can only make one claim for any period, so they must include all furloughed or flexibly furloughed employees in one claim.
  • When claiming for flexibly furloughed employees, employers should not claim until they are sure of the exact number of hours they will have worked during the claim period. If employers claim in advance and the employee works more hours, then the employer will have to pay back some of the grant to HMRC.

Whilst the new flexible furlough is a welcome boost for businesses, it is going to bring added complexity in calculating claim periods, entitlement and grant support under CJRS. Employers should provide their payroll team with this information as early as possible in the weekly/monthly payroll process.


The advice in this column is specific to the facts surrounding the questions posed.  Neither FPM nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.

Contact Feargal

Feargal McCormack / Managing Director

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