The guidance for the Furlough scheme (CJRS) has been updated on 12 June, as promised. However, the updated guidance still leaves questions unanswered.
This is an outline of the main points of the scheme from 1 July:
Claim periods must be for whole calendar months –
So it makes sense to ensure that a claim is made up to 30 June so that the timing of the claims will be in calendar months. This can cause problems in calculating the claim amount, particularly for weekly, fortnightly or four weekly payrolls. Where we are dealing with the claim on your behalf, we may need to discuss this with you to get it right.
Only previously furloughed employees can be claimed for –
To be included in a claim from 1 July, an employee must have been previously furloughed, and claimed for, at least once in the period from March to June.
Maximum number of employees is restricted –
This is something we would like clarification on. The guidance seems to say that a claim from July cannot be for more employees than claimed for in a previous claim.
It is possible for an employer to have, say, 15 employees and have kept some of them working (possibly rotating the furlough) so that the total furlough claim in any one period was for 12 employees. Even though all employees have actually been furloughed at some point, it will not be possible to make a claim for more than the 12.
We have some employers where this might apply. They were planning to take advantage of the ability to allow some part time work to put all employees on furlough and each carry out some part time work. It doesn’t sound as if that will be possible. Special rules will apply if an employee is returning from statutory parental leave.
Ability for employees to work reduced hours and still claim under the scheme for hours not worked –
If a claim has previously been submitted for an employee (ie they were furloughed for at least three weeks) it will be possible for the employee to work part time hours, be paid in full for these, and be furloughed for the remaining “usual” hours.
For example, if someone’s usual hours are 35 and that person is asked to work 20 hours in a week, it will be possible to claim furlough pay for the remaining 15 hours.
We assume that “usual hours” will be based on the previous tax year in the same way that furlough pay is calculated.
This is good news for employers trying to get their business going again. It provides more flexibility. Ensuring that we know who is working and the hours being worked will be extremely important. Expect more searching questions from our payroll staff.
The revised online claim form has a section where previous errors can be corrected. We have come across some where a claim has been submitted in advance of pay day (to try to get the refund in time to pay staff) but it has been necessary to bring an employee back from furlough in the interim period. It is very important that you notify us of anyone returning to work as soon as possible.
Further changes –
Don’t forget that the above applies in July. From August the level of support provided under the furlough scheme will reduce and cease completely after October. Please take this into account when making your plans for the next few months.
This article contains our best interpretation of guidance only published a few hours previously. We cannot be 100% certain that everything you need to know has been covered or that it is completely accurate. More detailed guidance is usually issued to payroll processors in due course. This sometimes contains variations from the original announcement.
If you haven’t done so already, you may like to read some of the previous articles on this topic (helps you go to sleep!)
If you want to read the HMRC guidance on which this article is based, it can be found here
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