COVID-19: Guidance published on the Flexible Furlough Scheme

On 12 June 2020, Government published and updated guidance to include further detail on the Flexible Furlough Scheme and explains how the Coronavirus Job Retention Scheme (‘CJRS’) is changing from 1 July 2020.


  • From 1 July 2020, employers will be able to:
    • Claim the CJRS for employees who have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June 2020
    • Flexibly furlough employees – this means an employer can bring employees back to work for any amount of time and any work pattern
    • Claim the furlough grant for the hours that flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period
  • There are some exceptions which are explained in guidance for employees returning from parental leave where a previous furlough period of 3 weeks may not be applicable. See our news on this.

Government contributions

  • From 1 July 2020, the furlough grant is  changing and employers will begin to contribute to furloughed (and flexibly furloughed) employees’ costs. See our news here.

Flexible Furlough Scheme

  • If employers decide to flexibly furlough employees, they will need to agree this with the employee (or reach collective agreement with a trade union) and keep a new written agreement that confirms the new furlough arrangement (albeit HMRC guidance states the employee does not have to provide a written response).
  • Employers will need to:
    • make sure that the agreement is consistent with employment, equality and discrimination laws
    • keep a written record of the agreement for five years (however other guidance states records relating to claims for flexibly furloughed employees should be retained for six years)
    • keep records of how many hours your employees work and the number of hours they are furloughed (i.e. not working)
  • Employees can enter into a flexible furlough agreement more than once and it can last any amount of time.
  • However, the period that employers claim for must be a minimum of 7 calendar days.

Making a claim

  • 31 July 2020 is the last day that employers can submit claims for periods ending on or before 30 June 2020.
  • From 1 July 2020, the scheme rules will change each month, meaning that any claim period starting on or after 1 July must start and end within the same calendar month.
  • The first time that employers will be able to make claims for days in July will be 1 July 2020.
  • The number of claims in any single claim period starting from 1 July 2020 cannot exceed the maximum number of employees claimed for under any claim ending by 30 June 2020.
  • Flexible furlough agreements can last any amount of time however the period employers must claim for is a minimum of 7 calendar days.
  • New guidance has been published in relation to calculating how much you can claim using the CJRS as well as guidance setting out steps to take before calculation a CJRS claim
  • Further new guidance gives a step by step example of how to calculate the amount employers should claim for an employee who is flexibly furloughed.
  • Updated guidance provides examples of how to calculate wages, NICs and pension contributions.

HMRC investigations

  • The new and updated guidance includes notifying HMRC of errors and information regarding misuse of the CJRS;
    • The full amount being claimed should be paid to the employee or used to fund associated NICs or pension contributions. Guidance states this should be the case even if your company is in administration.
    • If you do not use the full amount claimed in the prescribed manner than you will need to repay the money back to HMRC.
    • Employers cannot enter into any transaction with the employee which reduced wages below the amount claimed.
    • If you make an error when claiming which resulted in an overclaim, you must pay it back to HMRC. This can be reported as part of the next claim. For employers who have made an error and do not plan on submitting further claims, HMRC are working on a process to pay these back and guidance will be updated when this is available. Records of the adjustment should be kept for six years.
    • Guidance states CJRS grants cannot be used to substitute redundancy payments and “HMRC will continue to monitor businesses after the scheme has closed.”
  • See Aspire’s latest blog as part of the Health Check series “HMRC investigations are coming”. New legislation will provide HMRC will powers to impose a 100% tax charge in relation to the CJRS to recover payments in which employers were not entitled.

Other guidance updated on 12 June 2020;

Aspire Comment

There are many employers that will seek to utilise the flexible furlough scheme from 1 July 2020 whilst businesses reopen, however there is an administrative burden that comes with that. Employers must retain further agreements from employees and importantly, must ensure that their claim calculations are in line with HMRC guidance which may be easier said than done. It is vital that employers get processes right and retain all records relating to the CJRS and their decision making processes throughout to stand a chance of completing a HMRC enquiry once they begin to investigate employers who utilised the CJRS.

From 1 August 2020, making a claim under the CJRS requires a financial input from the employer and so, we are expecting that many employers will be forced to consider contractual reductions in pay, hours and redundancies.

If you require further guidance on furloughing staff or would benefit from support with contractual variations or redundancies, get in touch with us on 0121 445 6178

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