Changes to the Furlough Scheme

Changes to the Furlough Scheme

The Chancellor has made some changes to the Coronavirus Job Retention Scheme, otherwise known as ‘Furlough’.

At the time of writing there is no official guidance relating to the changes but if there are any surprises when the guidance is finally published, this post will be updated.

June:  10th June will be the last day you can place anyone on furlough.  So you will need to carefully consider what needs may be in the coming weeks and months and extend furlough agreements to meet that need.  This will be particularly pertinent if you are rotating staff through furlough.

July:  The new ‘flexible furlough’ will be introduced on 1st July.  The means that employees will be able to work for you part time but also be furloughed part time.  This is a big change from the original scheme when furloughed employees were barred from doing anything that contributed to the organisation’s income.

If you decide to use this new flexibility, you will need to pay your employee 100% salary for the time they are working for you and continue to reclaim from HMRC the 80% salary for those days they continue to be furloughed.  So, for example, you could bring someone back from furlough for 2 days a week and pay them their normal salary but retain them on furlough for the other 3 days at 80% of salary.

HMRC will be asking you to submit the employee’s normal working hours in addition to the hours they are working as part of this new flexibility.

August:  From 1st August the government will no longer reimburse you for furloughed staff employer tax, national insurance and pension contributions.  You will need to pay these yourself.  But you will still be able to claim the 80% salary.

September:  From 1st September the government will only reimburse 70% of furloughed employees’ salary up to a maximum of £2,190 a month.  Employers will be required to top up the money to 80%.  Remember, your agreement is to pay staff 80% of salary so don’t be tempted to reduce the salary to 70%!

October:  From 1st October the government will only reimburse 60% of salary up to a maximum of £1,875 a month and employers will continue having to top up to 80%.

31st October:  The furlough scheme will be discontinued.

Need help?  Contact me on 07766 167160 or through my website www.bdroper-hr.co. uk

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