Flexible furlough

sbgriseum

hi

We run a small business trying to make sense of the flexible furlough.

If we have a member of staff that we have previously claimed for then they come back for a few weeks, do we qualify for the on going furlough claims if required say in july / august if the work continues to be low. We have made x2 submission but one was for a part month as he came back. The wording doesn't explain this on the government guidance, do the have to be actively on furlough. Or if already claimed at some point for 3 weeks we are covered into July/aug/october if we need help.

Many thanks.!!

jimkelly

Yes, you can furlough any employee part time from Jul-Oct as long as they have been previously furloughed during the initial phase (i.e. up to 30 June) - for this, the last possible date to furlough anyone not previously furloughed is 10 June.

Look out for an email from HMRC explaining how it works, we've already had two since last night.

From your initial post, it appears your member of staff is eligible as they have already had an initial period of furlough.  I think the confusion you have is does the employee have to necessarily be furloughed on the 30th June (?), the answer to that is no.

Grumpy_chap

My current understanding differs from that of @jimkelly in that I understand (from listening to the news) the employee does need to have been on furlough from 10th June into 1st July to qualify for the flexible furlough.  That is not to say that my understanding is correct, but simply evidence that we all need to wait for the rules to be published before making any comment.  Can your Accountant not advise you better than a public forum?

jimkelly

Grumpy and OP, I can see how you came to that conclusion as I thought that myself originally.  However, when you think about it, that would mean placing someone on furlough (from June 10th - 30th) when they otherwise might not need to be.

I will copy in the email sent to employers from HMRC last night and mark the relevant bits in bold:


Dear customer,
Today (29 May) the Chancellor, Rishi Sunak, announced more details about the extension to the Coronavirus Job Retention Scheme (CJRS), with the key details outlined below for you.

Flexible furloughing
From 1 July 2020, you’ll have the flexibility to bring previously furloughed employees back to work part-time – with the government continuing to pay 80% of wages for any of their normal hours they do not work up until the end of August. This flexibility comes a month earlier than previously announced to help people get back to work.

You can decide the hours and shift patterns that your employees will work on their return and you will be responsible for paying their wages in full while working. This means that employees can work as much or as little as your business needs, with no minimum time that you can furlough staff for.

Any working hours arrangement that you agree with your employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, you will need to report and claim for a minimum period of a week. You can choose to make claims for longer periods such as on monthly or two weekly cycles if you prefer. You will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.
If your employees are unable to return to work, or you do not have work for them to do, they can remain on furlough and you can continue to claim the grant for their full hours under the existing rules.

Employer contributions
From August, the government grant provided through the job retention scheme will be slowly tapered.
• in June and July, the government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work
• in August, the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed
• 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, pension contributions and 10% of wages to make up 80% of the 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, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
• the cap on the furlough grant will be proportional to the hours not worked.

If you are a smaller employer, some or all of your employer NIC bills will be covered by the Employment Allowance, so you should not be significantly impacted by that part of the tapering of the government contribution.

Around a quarter of CJRS monthly claims relate to wages that are below the threshold where employer NICs and auto enrolment contributions are due, and so no employer contribution will be required for these furloughed employees in August.

Important dates
It’s important to note that the scheme will close to new entrants from 30 June. From this point onwards, you will only be able to furlough employees that you have furloughed for a full three-week period prior to 30 June.
This means that the final date that you can furlough an employee for the first time will be 10 June for the current three-week furlough period to be completed by 30 June. Employers will have until 31 July to make any claims in respect of the period to 30 June.

Guidance and support
Further support for employers and agents on how to calculate claims with this extra flexibility will be available by 12 June, including webinars and detailed online guidance. For information about how to claim, go to GOV.UK and search 'Coronavirus Job Retention Scheme'. Please do not call us for more information, everything you need to know about this scheme will be published online on GOV.UK.

Protect yourself from scams
Stay vigilant about scams, which may mimic government messages as a way of appearing authentic and unthreatening. Search 'scams' on GOV.UK for information on how to recognise genuine HMRC contact. You can also forward suspicious emails claiming to be from HMRC to phishing@hmrc.gov.uk and texts to 60599.

I hope this information helps and supports your business, and we’ll continue to keep you updated on scheme developments over the coming weeks.

Yours sincerely
 
Jim Harra
Chief Executive and Permanent Secretary – HMRC

Grumpy_chap

Thanks Jim,

I still read things differently to your interpretation, even the long e-mail from HMRC.  I am interpreting in the light of having watched the Chancellor's speech yesterday.

I agree with you on the apparent discrepancy that it could mean "placing someone on furlough (from June 10th - 30th) when they otherwise might not need to be."

It really depends on how the "previously furloughed employees" is interpreted:

•  - if that means an employee could have been furloughed, say, 1st to 30th April, then worked from 1st May onward, the employee retains "previously furloughed" status and can then be on flexible furlough from July, then your interpretation is correct.
•  - if "previously furloughed employee" means furloughed before and continuing up to end June, and can then go back on flexible furlough from July, then my interpretation is correct.

Both of the above interpretations of "previously furloughed employee" have their demerits.

Illusionary

From everything that I've seen surrounding the changes (including the Chancellor's speech and various written guidance), I'm almost certain that jimkelly's interpretation is correct here. The definition of "previously furloughed employee" is expanded upon in the "Important dates" paragraph above, in particular, "you will only be able to furlough employees that you have furloughed for a full three-week period prior to 30 June", i.e., any three-week period, not just the three weeks immediately leading up to 30 June.

The MSE guidance, which I gather has been written alongside additional press briefing documents, also supports this: https://www.moneysavingexpert.com/news/2020/05/government-announces-furlough-scheme-changes---what-you-need-to-/

Grumpy_chap

Thanks @Illusionary - that is helpful and does suggest that the interpretation from @jimkelly is correct.

sbgriseum

Many thanks, the mud is clearing............... I guess it is going to get even more complicated when teh flexible payments have to be worked out.