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August 21st 2020

Coronavirus: flexible furlough

Under the new "flexible furlough" rules which came into effect on 1 July, employees can now work for some of the week and be furloughed for the rest, with the agreement of their employer.

To be eligible, employees must have had three weeks of furlough leave prior to 30 June 2020 - which means they must have been put on furlough at some point on or prior to 10 June 2020.

The minimum three-week period has been removed as of 1 July 2020.

The government has published detailed guidance (available here) - readers beware that the calculations can be very complex, depending on the specific situation; our payroll team is here to help in case of any difficulty - contact Leonard or Sandra for assistance.

For pay periods starting on or after 1 August 2020, employers will no longer be able to claim for employer NIC contributions or any employer pension contributions.

Employers should continue to keep appropriate records for at least six years, including:

  • the amount claimed and the claim period for each employee;
  • the claim reference number;
  • the calculations of the amounts claimed; and
  • usual and actual working hours for each employee on flexible furlough.

Employers should identify the hours worked using pay records, time sheets and other appropriate records. This may be an issue for directors who do not work fixed hours; HMRC suggests "work diaries" or similar may be used to support the calculations in those circumstances.

Claim periods must now start and end in the same month, as the rules change from the beginning of each month; the percentage of wages that can be claimed will reduce again in September (to 70%) and October (60%). The £2,500 wages cap will continue to apply until the scheme comes to an end, on 31 October 2020.

Contact us today for assistance with your payroll.

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