19 June 2020
Flexible Furlough Rules

Are you ready for the changes in the Coronavirus Job Retention Scheme? Recently announced by Rishi Sunak, July sees the introduction of “flexible furlough” that will allow employers to bring back staff on a part-time basis, while the Government will start tapering their financial support for employees’ wages over the next few months.

If you’re an employer currently relying on the scheme to support your business during this difficult time, it is so important that you’re aware of – and planning for – the changes so you’re not at risk of losing the funding you are eligible to receive.

Here, we breakdown the dates announced in relation to the furlough scheme, and what you need to know for each change coming up.

June 2020

Changes to who can be furloughed

There are no changes to grant levels in June, however, from 10 June, no new employees can be furloughed. This is with exception of employees returning from statutory parental leave after 10 June.

July 2020

Introduction of flexible furlough

From 1 July 2020, employers can bring back previously furloughed staff part-time under new flexible furlough measures. Once agreed in writing with the employee(s) concerned, you can bring them back for any amount of time and still claim for the hours they are not working. Employers will pay for the hours that each employee works, including tax and NICs, while claiming for the difference between these hours and their usual hours up to the current 80% limit, which is capped at £2,500 per month.

It’s also worth noting that the minimum furlough period that employers can claim for changes this month. Prior to July, the minimum you could claim for was three weeks, but this is being reduced to seven days from 1 July, but employers cannot make claims that cross calendar months.

31 July 2020 is the deadline for submitting claims for the period ending on or before 30 June.

August 2020

Employer to pay NICs and pension contributions

While the Government will still cover 80% of furloughed employees’ wages up to the £2,500 per month cap, employers will need to pay the associated NICs and pension contributions on the wages from 1 August 2020.

September 2020

Tapered furlough

From 1 September 2020, the amount you can claim from the Government for your furloughed employees’ wages will change. The Government will cover 70% of furloughed employees’ wages up to a cap of £2,187.50, so employers will need to pay the additional 10% of the employees’ wages up to £312.50 and the associated NICs and pension contributions on the wages.

October 2020

Tapered furlough and end of CJRS

The amount you can claim from the Government for your furloughed employees’ wages will be tapered further from 1 October. The Government will cover 60% of furloughed employees’ wages up to a cap of £1,875, so employers will need to pay the additional 20% of the employees’ wages up to £625 and the associated NICs and pension contributions on the wages.

On 31 October 2020, the Coronavirus Job Retention Scheme will close.

Flexible-Furlough-Chart

For more information on the changes to the scheme, you can view the policy paper here, or see guidance on calculating your claim here.

We are #HereForSMEs, so we will keep you informed of all updates during this time so you can be aware of all the support being made available to you and your business.

If you have any questions or enquiries, please get in touch with the team here or call us on 01702 466 886.

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