We all remember TFI Friday, don’t we? The end of the working week; the start to the weekend. Time to kick back, relax, head out, enjoy some down-time with friends and family. Ah, those were the days. Fridays are different now – COVID-19 and lockdown has seen to that.
In the infamous words of Bob Dylan: “the times they are a-changin’”. Friday nights are now the chosen time for HMRC to announce the latest updates to the Government’s furlough scheme; hardly rock ‘n’ roll, but probably worth a listen. Last Friday was no exception as the guidance on the new flexible furlough scheme (FFS) was released.
The FFS will start on 1 July 2020. Under the FFS, employees no longer need to avoid doing any work for their employer, but will be able to work for some of the week and be furloughed for the rest. The proportions are to be decided by agreement between the employee and employer.
In a nutshell, from 1 July 2020, employers will claim a pro rata'd amount of 80% of salary, based on the proportion of hours not worked out of normal working 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 variable pay, you take the higher of (i) the average number of hours worked in the tax year 2019 to 2020; or (ii) the corresponding calendar period in the tax year 2019 to 2020.
The most significant change is that the minimum three week period for furlough has been removed (as of 1 July 2020). There is to be no minimum period going forward, although any claim through the Coronavirus Job Retention Scheme (CJRS) portal must be in respect of a minimum one week period. This means employers can only put in four claims per month not 31.
Unfortunately, along with making Friday night, furlough night, the Government has also continued with its habit of releasing this vital information in the most indigestible way. Instead of one neat, user-friendly guide, it has amended the existing guidance and added three new pieces of guidance just for good measure. It's not pretty. In fact, it’s so unappealing that it may mean some employers will be put off using it, and instead progress to redundancies. Let’s hope not.
The following is a summary of the new guidance (including the phasing out of the FFS from 1 July to 31 October 2020):
But, as ever, the devil is in the detail:
(1) Check if you can claim (original employer guidance doc - now version 14) - UPDATED
(2) Check which employees you can put on furlough guidance doc - UPDATED
(3) Steps to take before calculating your claim using the CJRS - NEW
(4) Calculate how much you should claim - NEW
(5) Claim for your employees' wages online - UPDATED
(6) Report a payment in PAYE RTI - UPDATED
(7) Part-furlough worked example - NEW
(8) Long list of worked examples - UPDATED
If you are an SME business owner, we appreciate that the challenges ahead are not only limited to the unenviable task of trying to save your business. Considering only one of HMRC's worked examples on how to calculate furlough for a flexibly furloughed employee is enough to dub the flexible furlough scheme with its now well-known acronym…
Finally, as tomorrow is Friday we should mention another new release: Rough and Rowdy Ways is the 39th
studio album from Mr Bob Dylan. Let’s hope the title is not as prophetic as previous ones have proved to be. Here at Burnetts, our Employment and HR team are always on hand to support you smoothly and calmly back to business and establish your “new normal” in these changing times.
If you would like to speak to someone within our Employment and HR team, please contact our offices on 01228 552222 or email firstname.lastname@example.org. Please note that both telephone and video appointments can be arranged.