01 July 2020

Lora Murphy ACIPP, CIPP policy and research officer, outlines and discusses flexible furloughing and the scheme’s operational rules from July

As promised, HM Revenue & Customs (HMRC) published in June a wealth of new guidance relating to how the Coronavirus Job Retention Scheme (‘the scheme’ or CJRS) will operate from 1 July 2020 to 31 October 2020. The concept of ‘flexible furloughing’ is introduced for this period, meaning that employees will be able to return to work on a part-time basis whilst still being eligible under the scheme.

The starting point in the official guidance is the CJRS collection page – http://ow.ly/cvua30qQ1oP – which links to all the pages for employers to access information about the scheme. Although HMRC has reminded customers that in the first instance they should use the guidance available for assistance, and to refrain from contacting them directly where possible, a support online is provided through a digital assistant (https://bit.ly/2YzG6Qy) as well as webchat and a helpline.

HMRC will be checking claims, and if found to be fraudulent payment can be withheld or if already paid out employers can be made to repay the sums.

Payments (grants) made under the CJRS are not classed as state aid.

The first point at which claimants can submit a claim through the new-style scheme will be from 1 July 2020, with 31 July 2020 being the final day that claims can be submitted for periods ending on, or before, 30 June 2020. From 1 July 2020, employers can bring employees back to work on any agreed work pattern and will still be able to claim the grant for any hours not worked.


Only employers that have previously successfully submitted claims under the scheme will be eligible for grants from 1 July 2020. Employees must have been furloughed prior to 30 June 2020 and, in order to observe the three-week minimum period required under the scheme previously, been placed on furlough not later than 10 June 2020.

The rules, however, differ where an employee is returning from a period of statutory parental leave. Such employees returning after 10 June 2020 can still be furloughed, if:

  • •  their employer has previously submitted a furlough claim between 1 March 2020 and 30 June 2020
  • •  they had commenced maternity, shared parental, adoption, paternity or parental bereavement leave prior to 10 June 2020 and returned from that leave after 10 June 2020
  • •  the employee was on a payroll for pay as you earn purposes on or prior to 19 March 2020 and was reported in a real time information submission return on or before the same date.

Businesses are not required to place all employees on furlough. They have the option to continue to fully furlough employees if they wish, but employees must not work for any time the employer records them as being on furlough. Employees can continue to take part in training, volunteering for another employer or can start work for another employer if contractually allowed.


The number of employees who can be claimed for under one claim from 1 July must not exceed the maximum claimed for under any claim ending 30 June. If, for example, the employer had furloughed 30, 20 and 50 employees in previous claims, then the maximum number of employees the employer can claim for from 1 July 2020 would be 50 in any single claim.

The exception is where employees are being furloughed for the first time because they are returning from a period of parental leave. In this instance, they can be added to the previous maximum number. So, to use the previous example, employers could claim for 50 staff plus any employees being furloughed for the first time who are returning from a period of parental leave.

From 1 July 2020, employers can make a new agreement with their employee for flexible furlough arrangements that will allow any shift pattern and working hours, and employees can be subject to flexible furlough agreements more than once.

When a previously furloughed employee starts a new furlough period before 1 July 2020, this period must be for a minimum of three consecutive weeks. This applies regardless of whether the three-consecutive-weeks minimum period ends before or after 1 July 2020.

For example, were a previously furloughed employee to start a new furlough period on 22 June 2020 – which would need to be for at least three weeks – the earliest it could finish would be 12 July 2020. Though the employee can then be flexibly furloughed for any amount of time, it must be for a minimum period of seven calendar days.

Claims for any periods starting before 1 July 2020 must end on or before 30 June 2020. This applies even where an employee furloughed in June continues to be furloughed full-time in July; separate claims must be submitted to cover the days in July and the days in June. Claim periods in this scenario will differ from the pay periods used.

HMRC has provided some examples of how to proceed where pay periods span more than one month. The examples can be found at http://ow.ly/k7gG30qQ15I.

Claims for flexibly furloughed employees should not be made until the employer is sure of the exact number of hours they will have worked within a claim period. If a claim is made, and an employee has worked more hours than HMRC has been notified, then some of the grant will be repayable to HMRC.

Scheme rules will change each month from 1 July 2020, so claim periods starting on or after that point must end with the same calendar month. If the pay period spans more than a month, separate claims will be required to cover the days in each month with each claim calculated separately.

CJRS calculations from 1 July 2020

  • Hours – If employees are fully furloughed there is no requirement to calculate their usual and their furloughed hours; employers should work out the maximum wage amount as before.
    • For any flexibly furloughed employees, employers are required to calculate their employee’s usual hours and record the actual hours they work in addition to furloughed hours for each claim period.
    • Two different calculations can be used to establish an employee’s usual hours, which will depend on whether they work fixed or variable hours.
    • Guidance on how to calculate the usual and the furloughed hours for employees who work both fixed and variable hours, along with examples, can be found here: http://ow.ly/k7gG30qQ15I.
    • Employers are responsible for paying employees for any hours that they work, and they must pay at the contractually agreed rates for those hours.
  • Pay – The calculations changed from 1 July 2020 for employees brought back to work on a part-time basis. For employees who are still fully furloughed, there are no changes to how the government funds the grant until the end of July 2020.

From 1 August 2020, the level of the grant will be gradually tapered. No grant will be available for class 1 employer National Insurance contributions (NICs) or pension contributions, and the employer must pay these.

From 1 September 2020, employers will also be required to contribute 10% towards the cost of their furloughed employees’ wages, with the government paying 70%. This will be for any usual hours not worked by furloughed employees.

From 1 October 2020, employers will be required to contribute 20% towards the cost of their furloughed employees’ wages, with the government paying 60%. This will be for any usual hours not worked by furloughed employees.

Employers have the option to top up employees’ wages above the minimum furlough pay amount but are under no obligation to do so. Employees must not work for employers that have furloughed them for any hours they are recorded as being on furlough, even if they receive a top-up wage.

There are several detailed working examples of how to calculate what needs to be paid to employees, and what can be reclaimed in terms of employee wages and also employer NICs and pension contributions. The examples can be accessed here: http://ow.ly/k7gG30qQ15I.

Using the online claim service

In addition to the information that employers needed in order to make a submission through the online service for furloughed staff, for flexibly furloughed employees they will also need:

  • •  to keep a record for each employee of the number of furloughed hours in the claim period
  • •  the number of usual hours the employee would work in the claim period
  • •  the number of hours the employee has worked or will work in the claim period.

Any business submitting claims for 100 or more furloughed employees must upload a file which will include the number of hours for the two latter bullets above.

A new template for use for claims from 1 July 2020 will be provided by HMRC.

In addition to the previous record-keeping requirements, for flexibly furloughed employees, employers will need to keep for a minimum period of six years records of the usual hours worked and any associated calculations and the actual hours worked.

Scheme end

When the scheme closes on 31 October 2020, employers must decide whether furloughed employees can return to their normal hours. If they cannot then it may be necessary to consider reducing their hours or terminating the employment. Employers must remember that normal redundancy rules apply to furloughed employees.

Featured in the July/August 2020 issue of Professional in Payroll, Pensions and Reward. Correct at time of publication.