hmrc flexible furlough

Businesses will have the flexibility to bring furloughed employees back to work part time from today (1 July) as part of the government’s plan to re-open the UK and kick-start our economy. The Flexible Furlough Scheme started on 1 July 2020 as Stage II of the Coronavirus Job Retention Scheme (CJRS), which is available to employers whose operations have been affected by COVID-19.. UPDATE 1 November 2020. A Fixed Hours Flexible Furlough Worker. Here are the rules employers and employees need to know to access the government’s flexible furlough scheme that launched on 1 July. However, the main features of the new scheme remain as outlined by the Chancellor on 29 May. Employers making discretionary ‘top up’ payments to furloughed employees should consider whether those agreements remain sustainable in light of the reducing JRS grant and the complexities of the new rules. Claims for overpayments can now be made through adjustments to future claims (see our accompanying article). Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them - and will be responsible for paying their wages while in work. On Friday (12 June), HMRC published an update to the guidance on the Coronavirus Job Retention Scheme (CJRS) with some additional details of the flexible furlough scheme. Some employers may not have this data available for all employees. Previously, staff needed to be furloughed for at least three … Find out more about furloughing your employees . Employees can be furloughed on or after 1 July and return to work on a flexible part time basis if they: There will be no minimum furlough period after 1 July, and whilst this flexibility is welcome, in practice it could complicate the relevant calculations and claims. This is important because there have been no claim deadlines imposed before now. The answer is not the logical one, but it aligns with the published guidance. July 2019 actual hours: 120 (and higher than the 2019/20 average), so 120 becomes the “usual hours”, so 80 furlough hours, so claim 80/120 of February 2020 salary (per HMRC calculator for Jul & Aug). Flexible furlough from the 1 st July. For an employee to be eligible for flexible furlough, they must have been furloughed for a 3-week period during or before June. The employer must fund the difference between the reducing JRS grant and the minimum payments it is required to make to furloughed employees in respect of non-working hours. Key to getting the answers HMRC expects from its furlough grant claim calculator, are the hours that employers feed in. How long must flexible furlough last? Browse articles,  set up your interests, or Learn more. Any sort of working pattern is permitted under the flexible furlough scheme. This may be a far more difficult task than under the first version of the scheme. Don’t include personal or financial information like your National Insurance number or credit card details. Please experiment and enjoy (if that is the correct word!) This is in direct response to employers asking how they can return grants voluntarily – and businesses are under no obligation to do this, but should contact HMRC if they want to pay the grant back. For more detail about the structure of the KPMG global organisation please visit https://home.kpmg/governance. From 1 July, employers can bring furloughed employees back to work for … There are different rules for employees who normally work fixed hours, and those who work variable hours. The scheme will remain open until the end of October and will continue to support jobs and business in a measured way as people return to work, our economy reopens and the country moves to the next stage of its recovery. For the period of the claim the employer must enter: usual working hours, and; actual working hours. However: CJRS2 August 2020 actual hours projected: 80. Flexible furlough is generally viewed as crucial to helping the economy recover post-lockdown while also supporting income levels. a single claim cannot be made for August and September); The final claim submitted for the period to 30 June could impact the size of future claims that can be made. From 1 July 2020, furloughed workers can return to work on a flexible, part time basis. This formula was harsh for employees within Commission based industries as it meant that they would be receiving 80% of their basic pay but in many cases only 25%-50% of their … From 01 July 2020, when the flexible furlough scheme commenced, it will be possible to allow workers to work part time. The government has also announced that businesses who no longer need the CJRS grants they previously claimed have the option to voluntarily return them. The new guidance also confirms that HMRC will carry out additional checks where underpayments are claimed. In our experience, even seemingly reasonable shortcuts can lead to claims which diverge significantly from the correct methodology and which would be open to HMRC challenge (as well as the risk of challenge from any employees who may feel they have been underpaid). 27 hours are furlough hours. It’s complicated. An employer cannot claim for hours worked through HMRC's Coronavirus Job Retention Scheme. For this reason, HMRC gave a final start date for employers to enter an employee into the scheme as 10 th June. However, if the employee was already due to be working under the flexible furlough scheme, all holiday time during that period should be treated as furlough according to the guidance. View KPMG's bi-weekly newsletter covering the latest issues in taxation and government announcements relating to tax matters. … Chancellor of the Exchequer Rishi Sunak said: Our number one priority has always been to protect jobs and businesses through this outbreak. New agreements will have to deal with the new working arrangements and will be recorded in writing. We’d like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services. These calculations are based on the hours the worker would ‘usually’ work in the claim period. HMRC have issued detailed guidance on how the Job Retention Scheme will operate from 1 July 2020. The flexible furlough scheme can be used in respect of employees who have previously been furloughed for at least three consecutive weeks at any time prior to 30 June 2020. With flexible furlough, more information is required. The new guidance prescribes the detailed methodology and contains over 30 different example calculations which, while helpful, inevitably cannot cover all circumstances. Employers should therefore review historical claims to confirm whether they are correct. From 1 July, flexible furlough periods can last for any amount of time (there is no need for a three week minimum period). Save what resonates, curate a library of information, and share content with your network of contacts. If staff are on flexible furlough, they can do work for their employer during the hours they are not on furlough. You will not continue to receive KPMG subscriptions until you accept the changes. divide by 7 and multiply by 7 On 12 June, the Government released further guidance on how the flexible furlough scheme will operate from 1 July 2020. All rights reserved. © 2021 KPMG LLP a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. So if the employee is on furlough for the whole month (which the government define as ‘fully furloughed’), then this will be the … Duncan McCombie, CEO of Yes Energy Solutions, said: The approach lets us to better manage a fluctuating workload, where those working are doing some additional hours. HMRC confirms usual hours calculation for flexible furlough 30 June: The day before flexible furloughing is introduced to the CJRS, HMRC has confirmed to ICAEW how usual hours should be calculated. It is not the HMRC calculator although the calculations are based on data entry into that system and the results obtained. Given the initial uncertainty over the basis for grant calculations, some employers will have made historic claims on a ‘best estimate’ basis. 1. Who can go on flexible furlough? Since the last time you logged in our privacy statement has been updated. Please note that your account has not been verified - unverified account will be deleted 48 hours after initial registration. The calculation of the grant payable is now more complex. (45 - 18 = 27 hours furlough pay) is correct for the 7 day period. You will not receive KPMG subscription messages until you agree to the new policy. The Flexible Furlough calculator can be found here. Currently, employers can claim grants under the JRS equal to 80 percent of a furloughed worker’s reference pay (capped at £2,500 per month) plus the associated employer’s NIC and minimum pension contributions. and happy flexible furlough calculations. The grant contribution to the furlough pay reduces from 1 July 2021 so a further step is required to calculate how much to claim. Find out how KPMG's expertise can help you and your company. Flexible furlough. Businesses will have the flexibility to bring furloughed employees back to work part time from today (1 July) as part of the government’s plan to re-open the UK and kick-start our economy. Without this flexibility we would really struggle to cope as we endeavour to grow turnover back to something approaching normal levels whilst trying to keep a lid on short-term costs. Click anywhere on the bar, to resend verification email. Employers must also pay employees for all the hours that they work. Businesses will be asked to contribute a modest share, but crucially individuals will continue to receive that 80% of salary covering the time they are unable to work. Reporting hours worked and ‘usual’ working hours in a claim period. A great addition to the options available for business leaders. To help us improve GOV.UK, we’d like to know more about your visit today. ... 1st September – employers pay 10% of furlough wages. Her Majesty's Revenue & Customs is the UK’s tax, payments and customs authority. THIS REFLECTS HMRC GUIDANCE ISSUED UP TO 1 NOVEMBER 2020. You can only consider an employee as eligible to be covered under the flexible furlough system if they have been previously furloughed, as at 30 June 2020, at least once, for a minimum of three weeks. The ‘usual hours’ the employee would otherwise have worked in that claim period. Last night, HMRC released details of the flexible furlough scheme, which starts on 1 July 2020. The number of employees that can be included in a single claim from 1 July cannot exceed the highest number of employees included in any one claim submitted under the scheme for periods up to 30 June; and. 30 June: Employers will be able to make claims for grants under the flexible furlough scheme (CJRS V2) from 1 July 2020. Marco Olmi, Managing Director of London-based international coffee wholesaler The Drury Tea and Coffee Company, said: The ability to bring our staff out of furlough in a flexible manner will be enormously beneficial as the industry eases out of lockdown. This scheme is an adaptation to the original Job Retention Scheme, and has been designed as a way to assist employers bring furloughed employees back into work on a part time basis while still being able to claim financial assistance from the Job Retention Scheme. We use some essential cookies to make this website work. To be eligible for the grant employers must pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they are being furloughed. Review use of furlough arrangements after 1 July. You can change your cookie settings at any time. The furlough scheme, which will have been open for eight months by October, has been a lifeline for millions of people and as our economy reopens we want that support to continue. All content is available under the Open Government Licence v3.0, except where otherwise stated, Read about the arrangements following The Duke of Edinburgh’s death, Support for businesses and self-employed people during coronavirus, Holiday entitlement and pay during coronavirus (COVID-19), Steps to take before calculating your claim using the Coronavirus Job Retention Scheme, Reporting employees' wages to HMRC when you've claimed through the Coronavirus Job Retention Scheme, Coronavirus (COVID-19): guidance and support, Transparency and freedom of information releases, from today businesses can bring furloughed employees back to work on a part time basis, firms will be given the flexibility to decide the hours and shift patterns of their employees – with the government continuing to pay 80% of salaries for the hours they do not work, Coronavirus Job Retention Scheme has so far helped protect more than 9.3 million jobs. Originally, an Employer could claim up to 80% wages (capped at £2,500 per month) for each individual on furlough, but the amounts change for periods of flexible furlough from 1 July 2020 to 31 October 2020. Don’t worry we won’t send you spam or share your email address with anyone. The calculation methodology is complex and will require employers to obtain data on working hours for those employees returning to work part time. From August, the level of government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work. Eligible employees and flexible furlough Employees can be furloughed on or after 1 July and return to work on a flexible part time basis if they: Had already been furloughed for a period of at least three consecutive weeks in the period from 1 March – 30 June 2020; or Start with the amount of minimum furlough … The scheme is due to begin on 1 July and enables employers to have furloughed staff carry out work for them on a part-time basis. The additional complexity introduced by the new calculation methodology means some employers may be tempted to continue this approach. It is conceivable that enforcement powers may be handed to HMRC along the same lines of National Minimum Wage enforcement and so employers will want to ensure their calculation methodology is robust. Claims for periods ending on or before 30 June must be submitted by 31 July. More information about the changes can be found here. Flexible furlough system 18/07/2020 - 11 minutes read. Claims can be made under the new scheme from 1 July. This, coupled with increased media and stakeholder scrutiny over whether it is appropriate to use the Job Retention Scheme (JRS), in particular where an employer subsequently makes redundancies, pays dividends or maintains senior executive pay levels, may leave employers concerned to ensure that any claims they do make are robust. You claim by the 7 day period, not 5 day working week. Although furlough can be any length of time, a new minimum claim period of one week will apply; Special rules allow claims to be made for periods of less than a week at the start and end of the month if these would otherwise be outside a claim; Claim periods must begin and end in the same month (e.g. A furlough day is, somewhat confusingly, a day during which an employee is either fully furloughed, or under a flexible working arrangement. ... HMRC will expect the following information for each employee: What HMRC refers to as the usual hours and usual wage should be worked out and recorded, because these will be used to work out that proportion of the employee’s salary that is funded by your business, and what proportion is … This limit, however, does not include any employees who have returned from statutory parental leave and been furloughed for the first time in that claim period. Employers do not need to place all of their employees on furlough and they can fully furlough employees if they wish. However the financial support from the Treasury will be phased down from 1 August, with employers meeting the shortfall. Sourcing relevant data on hours worked will be key. HMRC’s new guidance sets out how claims should be calculated for furloughed workers from 1 July 2020, including those who return to work part time. If you need the letters in a different format, or you cannot download them, email digital@acas.org.uk . The government’s Coronavirus Job Retention Scheme (CJRS) has so far helped protect more than 9.3 million jobs through the pandemic, with employers claiming more than £25.5 billion to support wages. 1. Claims for employees returning to work on a part-time basis can only cover ‘usual’ working hours in the claim period that are not in fact worked. Employers will need to identify employees who will be furloughed on or after 1 July, revisit employee communications, and renegotiate furlough agreements with employees who will return to work part time. What is “flexible furlough”? The difference between these is the furloughed hours on which the grant claim is based. It’s complicated. Employers will also have to pay employees in full for any hours they work from 1 July. As of 12 June 2020, the JRS guidance is far more complex, totaling nine pieces of employer guidance, six which have been substantially amended and two which are new. Furlough is a type of leave for employees or workers to stop work temporarily during the coronavirus (COVID-19) pandemic. 80% up to £2,500 per month. Returned from statutory parental leave after 10 June (this has been added since the announcement on 29 May). As before, employees cannot undertake any work for their employer during the hours that the employer records them as being on furlough. Employees on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts can be put on flexible or full-time furlough as long as they were employed and on the payroll on the following dates: For periods ending on or before 30 April 2021, employers can claim for employees who were employed on 30 October 2020, as long as the employer made a PAYE Real Time Information (RTI) submission to HMRC … Understand the methodology for calculating a claim and collate the relevant data. Please take a moment to review these changes. Under the flexible furlough scheme, employees no longer need to avoid doing any work for the employer, but can work for some of the week and be furloughed for the rest, in … Get the latest KPMG thought leadership directly to your individual personalised dashboard. The flexibility will allow us all to better balance the pressure on those working, support childcare responsibilities and a ease in a return to work after 100 days for those furloughed. We also use cookies set by other sites to help us deliver content from their services. HMRC have now released detailed guidance on how claims can be made for periods from 1 July. Companies across the UK who are bringing back furloughed staff today include The Drury Tea and Coffee Company, and Yes Energy Solutions. Employers should ensure they understand the detailed requirements, and that their processes and systems are ready to calculate the new claims. Giving firms the flexibility to bring back furloughed workers on a part-time basis will help them work gradually and help them plan for the months ahead. It will take only 2 minutes to fill in. When the Furlough scheme rules were first made available on 25 th March 2020, the government website stated that ‘fees, commission and bonus’ were not recoverable for employees placed upon Furlough leave. However, see point 3 under “claim periods” below. What are the key features of the new scheme? We want to ensure that you are kept up to date with any changes and as such would ask that you take a moment to review the changes. After some confusion regarding how flexible furlough should be calculated, HM Revenue & Customs (HMRC) has offered new guidance to help employers work out usual working hours. The scheme was due to end on 31 October 2020, but has been temporarily extended with new … From today, a month earlier than previously announced, employers will have the flexibility to bring furloughed employees back to work on a part time basis. Different rules for employees who normally work fixed hours, and Yes Energy Solutions issues! And collate the relevant data they wish work for their employer during the hours that the records. These calculations are based on the bar, to resend verification email final start date for employers enter! Issues in taxation and government announcements relating to tax matters UK who are back... For at least three … 80 % up to £2,500 per month for hours worked to KPMG. Longer need the CJRS grants they previously claimed have the option to voluntarily return them - unverified will... Claims can be found here experiment and enjoy ( if that is the furloughed hours which... 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In taxation and government announcements relating to tax matters how the Job Retention scheme: new flexible furlough scheme only. Kpmg subscription messages until you agree to the options available for business leaders sourcing relevant data below! Will carry out additional checks where underpayments are claimed estimate’ basis Job Retention scheme will from! 'S Revenue & Customs is the furloughed hours on which the grant payable is now more complex claim period the. Financial information like your National Insurance number or credit card details guidance on claims! Also supporting income levels employer must enter: usual working hours the furloughed on! Deleted 48 hours after initial registration ’ s tax, payments and Customs authority ’ d to... And your Company tax, payments and Customs authority KPMG global organisation please visit https: //home.kpmg/governance claims can made... A far more difficult task than under the first version of the claim period one but. 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All of their employees on furlough and they can fully furlough employees they. Back furloughed staff today include the Drury Tea and Coffee Company, and ; working! Answer is not the logical one, but it aligns with the new policy worked will key... In the claim period hmrc flexible furlough Insurance number or credit card details also have to deal the. Furlough scheme, which starts on 1 July 2020, when the furlough! Resend verification email HMRC guidance issued up to £2,500 per month phased down 1..., which starts on 1 July means some employers will have made historic claims on a flexible, time... Returning to work part time per month we won ’ t send you a link to feedback... You logged in will require employers to obtain data on hours worked through HMRC 's Job! You spam or share your email address with anyone Sunak said: number. 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