Employers will only be able to qualify for furlough grant payments if they have claimed under the old rules which applied before 1st July. This means employees must have been furloughed by 10th June to qualify.
The Government will also place a new limit on the number of staff who can be included on a furlough claim, based on the maximum staff included in any single pre 1st July claim.
The Government will taper down its contribution from August to October, when the scheme will end.
Flexible Furlough from 1st July 2020
From 1st July, employers can bring back employees that have previously been furloughed for any amount of time and any shift pattern, while still being able to claim a Coronavirus Job Retention Scheme grant for their normal hours not worked.
In respect of using Flexible Furlough, employers must agree with their employee any new flexible furloughing arrangement and confirm that agreement in writing. Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period.
As an example of the complexity, employers will need to report to HMRC, hours worked and the usual hours an employee would be expected to work in a claim period. For worked hours, employees will be paid by their employer and employers will be responsible for paying the tax and NICs due on those amounts.
Another proposed change is that when claiming the Cornovirus Job Retention Scheme grant for furloughed hours, employers will need to report and claim for a minimum period of a week. More frequent claims will not be accepted, but the reporting period can be longer.
HMRC have not yet commented on how Flexible Furlough arrangements would work for directors of limited companies.
Closure to new entrants from July
While many employers will welcome the new flexibility the amended scheme will offer, it is important to be aware that the Government do intend to wind this scheme down and are taking steps to prevent new entrants being eligible to use the scheme.
Key deadlines and limits
- From 1st July, the scheme will only be available to employers who have previously used the scheme in respect of employees they have previously furloughed. This effectively means that the final date by which an employer can furlough an employee for the first time will be the 10th June, in order for the current three-week furlough period to be completed by 30th June.
- Employers will have until 31st July to make any claims in respect of the period to 30th June.
- The number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim under the current Coronavirus Job Retention Scheme.
- From 1st July, claim periods will no longer be able to overlap months, employers who previously submitted claims with periods that overlapped calendar months will no longer be able to do this going forward. This is necessary to reflect the forthcoming changes to the scheme.
- Employers will be able to make their first claim under the new scheme from 1st July.
The HMRC Factsheet section on closure to new entrants provides further details.
For our latest COVID-19 news and guidance for your business, visit our dedicated Coronavirus Hub.
We will be updating it regularly as we continue to monitor and digest all the latest information
Date published 2 Jun 2020 | Last updated 2 Jun 2020
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