Flexible Furlough – key changes to the Coronavirus Job Retention Scheme from 1 July

During the ongoing COVID-19 pandemic, the Coronavirus Job Retention Scheme (CJRS) has been invaluable to small and large businesses alike in allowing them to place employees on “furlough”, giving them access to Government support to continue paying part of these furloughed employees’ salaries and potentially protect the employees from redundancy.

New figures show that 9.3 million people in the UK have been furloughed with £25.5 billion in wage subsidies being paid to employers. Up to 500,000 employees have already left the furlough scheme and it is expected that with the reopening of the hospitality sector on 4 July this number will grow substantially.

In steps aimed at allowing more employers to reintroduce furloughed employees back into the workplace, 1 July sees some key material changes to the job retention scheme:

• From 1 July 2020 employees on furloughed leave will be able to carry out work on a part time basis with the employer meeting the cost of the hours worked.  The Job Retention Scheme grant will still be available for hours not worked.  This is known as “flexible furlough”.  Flexible furlough adds complexity to claims, for example for changes to NIC calculations and claim periods.
• From 1 July 2020, employers may only furlough employees for whom they have already made a valid CJRS claim for the period 1 March 2020 – 30 June 2020.  In practice this means that employees can only be furloughed after 1 July 2020 if they have previously been furloughed for a period of at least 3 consecutive weeks commencing before 10 June 2020.  This change can lead to uncertainties over claims, for example where employees have been re furloughed.

While there are currently no changes to the level of grant available, further changes to be phased in between 1 August and 1 October 2020 will see the level of assistance reduced until the scheme’s expected end date on 31 October 2020.

It is important that business keep up to date with the changes as they happen and with HMRC set to take a firm stance on any incorrect claims, it’s now more important then ever to seek advice before making a claim for a grant under the CJRS.

For more information on the Coronavirus Job Retention Scheme or for help in making a claim, contact a member of the team today.