15 June - Latest changes to the Furlough scheme

The Changes to Furlough over the next few months:

On 12 June 2020, HM Revenue and Customs published further updates to the official guidance on the Coronavirus Job Retention Scheme (CJRS). There are important changes that everyone needs to be aware of that will be introduced gradually from 1 July up to the end of October.

From 1 July, employers will only be able to furlough employees who have already been furloughed for the minimum period of three weeks. This confirms the previous announcement that the last date on which employers could furlough employees for the first time was 10 June.

From 1 July, however, for those who had previously been furloughed, the minimum furlough period of three consecutive weeks will no longer apply. Instead, flexible furlough agreements can last for any period.

There is still a requirement to ensure any new agreement is recorded in writing, but there is a further change to indicate that an employer will have to pay employees in full for hours worked, with CJRS grants only available for normal hours not worked. The updated guidance includes a worked example of how to calculate pay for a flexibly furloughed employee and it is important that anyone wanting to adopt this way of working should take a look.

Here's one of HMRC's worked examples of how to calculate furlough for a flexibly furloughed employee. 

The use of flexible furlough will continue up to October, but CJRS grants will be reduced from 1 August. From then, employers will have to pay employer NI contributions and employer pension contributions, with the CJRS continuing to pay 80% of wages up to a cap of £2,500. From 1 September, employers will also have to pay 10% of wages, with the CJRS paying 70% (capped at £2,187.50); and from 1 October, employers will have to pay 20% of wages, with the CJRS paying 60% (capped at £1,875).

Finally, it’s also been confirmed that a parent returning to work after statutory maternity, paternity leave, adoption or child bereavement leave, will not be included in the 10 June cut off period for being furloughed for the first time - provided that the employer has used the furlough scheme for other eligible employees by that date.

There is plenty of change, and there may be more, so it’s important to keep up to date.

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