Careers Insights Client Zone

  • Our Services
  • How We Help
  • Meet The Team
  • Careers
  • Insights
  • Contact Us
  • Client Zone
01752 697397 Contact Us

Changes to the Furlough Scheme – “Flexible Furlough”

5 mins to read 01/07/2020

From 1 July the Coronavirus Job Retention Scheme, commonly known as the furlough scheme, will be changing with further updates each month until it’s closure on 31 October 2020. From this date there will currently be no further support for businesses to pay their employees.

The changes are gradual with the intention of encouraging employers to bring employees back to work.

1 July 2020 – introducing flexible furlough

From 1 July 2020 employer’ will be able to bring employees back to work on a part time basis and the Government will only provide support for hours not worked. Employers will therefore need to cover the full cost of the hours worked, but the furlough grant rules will apply to the hours not worked, providing 80% of furloughed salary costs up to £2,500 cap. In relation to the hours not worked, the rules are unchanged from June.

However, employers will only be able to claim for employees who have previously been furloughed for a three-week minimum period.

Also from this date the number of employees that can be claimed for in a furlough period cannot exceed the maximum number claimed for under any previous claim period.

There are HR issues to be considered when bringing employee’s back to work on a part-time basis as it will need their agreement as a temporary variation of contractual terms. The revised working hours can be changed throughout the period, but each arrangement must cover at least one week.

The furlough grant claim will increase in complexity if staff are on flexible furlough, particularly for those employees with variable hours and pay. Claims will also now need to be split per month as the rules change at the beginning of each month. This means for a payroll period that straddles a month end that two separate furlough claims will need to be made for each pay period. HMRC’s examples of calculations can be found here. Hours worked and not worked will need to be included in the claim for each employee.

31 July is also the last date that employers will be able to submit claims for periods prior to 30 June.

August 2020 – reduction in Government support

From 1 August, employers will have to cover employers’ National Insurance and pension costs for furloughed workers. For many smaller businesses this will not dramatically increase costs as employers National Insurance is covered by the Employment Allowance.

For time not worked, the scheme will continue to provide 80% of furloughed wages up to £2,500 cap.

September 2020

From 1 September, employers will, in addition to previous changes, have to start contributing towards the furlough scheme costs. For September 2020, this will amount to 10% of furloughed wage costs for time not worked.

For time not worked, government support will reduce to 70% of furloughed wages up to a revised £2,187.50 cap. Despite the reduction in support, the employer will still need to pay the employee the lower of 80% of the relevant salary and £2,500 per month.

October 2020

From 1 October, employers will pay a further increased contribution to the furlough scheme costs. For October 2020, this will amount to 20% of furloughed wage costs for time not worked.

For time not worked, government support will reduce to 60% of furloughed wages up to a revised £1,875 cap.

Full guidance from HM Revenue & Customs can be found here.

Streamlining Payment Runs: Say Goodbye to Manual Hassles

3 mins to read 27/11/2023

Autumn Statement 2023

3 mins to read 23/11/2023

Reporting early payment of wages before Christmas

2 mins to read 20/11/2023

Let's grow your business together

Get in touch
office@bromheadco.co.uk 01752 697397

Harscombe House 1 Darklake View Estover Plymouth PL6 7TL

Information

How We Help Our Services Meet The Team Terms and Conditions Privacy Policy Legal Documents

Get the latest news sent directly to your inbox

Linkedin Twitter

Bromhead is the trading name of Bromhead Ltd | Registered office: Harscombe House, 1 Darklake View, Estover, Plymouth, PL6 7TL Company number: 7167909 © 2023. All rights reserved. Website built by Elixel