On Friday night HMRC released details of the flexible furlough scheme, which starts on 1 July 2020. Under the flexible furlough scheme, employees can work for some of the week and be furloughed for the rest, in proportions decided between employee and employer.
The minimum three week period for furlough has been removed (as of 1 July 2020). There is no minimum period, although any claim through the CJRS portal must be in respect of a minimum one week period (i.e. employers can only put in four claims a month, not 31).
Guildford HR recommends that you discuss the calculation with the payroll department/provider to decide how you will provide the information for processing, as this will be needed for potential evidence if the business has an HMRC audit in the coming years, documentation needs to be kept for 6 years (up from 5 years in the initial guidance).
In July, Employers will be able to claim a pro-rata’d amount of 80% of salary, based on the proportion of hours not worked out of the normal working hours.
How do I calculate normal hours?
To calculate the normal working hours for those with fixed hours/pay, you simply take the number of hours worked in the pay period before 19 March 2020.
To calculate the normal working hours for those with a variable pay, you take the higher of (a) the average number of hours worked in the tax year 2019 to 2020 or (b) the corresponding calendar period in the tax year 2019 to 2020.
The employee will be paid at 100% for the hours worked.
It is likely you will need to update the Furlough Agreement you are using.
Here’s one of HMRC’s worked examples of how to calculate furlough for a flexibly furloughed employee.