It has been 6 weeks since the portal opened which allowed businesses to reclaim their wage cost for all staff members they have ‘furloughed’. As HMRC allowed us as agents (unlike with the self-employment income scheme claim) the ability to submit the claims on our client’s behalf it is safe to say this has occupied almost all of my working time since 20 April!

And late Friday evening, the changes coming were announced in more detail which closes the first phase of the scheme on 30 June 2020.

The new phase will run from 1 July to 31 October 2020.

The new phase, call it phase 2, allows you to bring back previously (more on this later) furloughed employees part time to suit your business needs. You will then be able to claim for time they do not work for you, based on their usual working hours.

To qualify as ‘previously furloughed’ you must have furloughed this staff member prior to phase 2 starting. Practicality, in order to abide by the current three week minimum period, this means the last date in which you can furlough someone for the first time is 10 June 2020. 

There is also now a deadline on when employers must make a claim to inform HMRC of these previously furloughed staff. All claims in respect of periods to 30 June 2020 must be claimed for by 31 July 2020.

There are also more controls in this second phase on the claim making process. One being that claims will no longer able to overlap calendar months. Another being about the maximum numbers of employees you can claim for. HMRC’s guidance states ‘The number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim under the current CJRS.’

The way I am interpreting this could cause some employers to become caught out when using the part time flexibility depending on what claim periods they have previously worked to. For example, if you were an employer who put half of your total of 20 staff on furlough on a three week rotation and submitted a claim every three weeks, you would only ever have claimed for 10 employees at a time. If you then wanted to bring everyone back but part time, it would mean under phase 2 you were now wanting to claim for 20 people.

There may be further clarity released in the coming days but it is worth thinking about if this impacts you as you may want to change your next claim period length to capture all employees.

Phase 2 also brings in more to report on the claim (each employee’s usual hours) and more calculation guidance to review/interpret (to be published on 12 June) from HMRC.

From 1 August 2020 the level of the grant will be tapered off to ‘reflect that people will be returning to work’. From this date the employer NICs and pension cost for furlough staff is no longer claimable. The tapering off will go as follows for wages in 100% non-working periods:

  • August – Grant will continue to be covered at the 80% capped at £2,500
  • September – Grant will cover 70% of wages capped at £2,187.50 and employer covers the 10%
  • October – Grant will cover 60% of wages capped at £1,875 and employer covers the 20%

This shows that the employees furloughed will still receive the minimum 80% (or their full entitlement based on their contract of employment) as they would have done since 1 March, but the government is now asking for an employer contribution.

Cannot see a rest for me anytime soon, see you in November!?

HMRC’s published factsheet can be found here  –