Flexible Furlough Scheme and Update to Full Furlough Scheme Arrangements
On 12 June, HMRC released further details of the flexible furlough
(part-work/part-furlough) scheme, which begins on 1 July 2020. Under the
flexible furlough scheme, employees can work for their employer for some of
the week and be furloughed for the rest, in proportions decided between
employee and employer. When working, employees will be paid their normal
wage and receive the furlough grant for the rest of their usual working
hours. Employers do not have to offer flexible furlough arrangements and
are able to leave staff on full furlough.
The rules on how flexible furlough is calculated are complex but, in
general terms, employers will claim a pro-rated amount of 80% of salary,
based on the proportion of hours not worked out of normal working hours. In
order to submit a flexible furlough claim, the employer is required to
calculate a “baseline” number of “usual hours” so that this can be compared
with the actual hours worked.
If employers opt for flexible furlough arrangements, they will have to
secure the employee’s written agreement to these arrangements.
Additionally, employers are required to retain records of the usual hours
worked by each employee (including details of the calculation used to
ascertain usual hours) and the actual hours worked. These records should be
kept for six years.
In respect of full furlough, the minimum three-week period for furlough has
been removed with effect from 1 July 2020. There is no minimum furlough
period after 1 July, although any claim must relate to a minimum one-week
period. In the period after 1 July 2020, a furlough claim must start and
end within the same calendar month. This is to take account of the fact
that the scheme is changing from month to month in terms of the increasing
contributions required from employers.
It is now too late for employers to furlough staff for the first time. The
only exception to this rule is where an employee has returned from
maternity or other family leave, e.g. maternity, paternity or shared
The Coronavirus Job Retention Scheme (furlough scheme) will end on 31