Furlough Scheme – Mark 2

Posted: 18th Jun
Self Employed

The government has now announced further details of the flexibility which will be built into the furlough scheme from 1st July.

It also remains the case that employer contributions will be required from 1st August and will increase each month until the scheme is phased out on 31st October.

The additional flexibility of the scheme effectively means that the current furlough scheme comes to an end on 30th June and is replaced by a new scheme from 1st July. This has important consequences both for who can be furloughed and for the making of claims, and which we discuss further below.

But before we look at the details of the new scheme, we need to draw your attention to the fact that ALL furlough claims for periods up to 30th June MUST be submitted to HMRC by 31st July. Where we are already completing furlough claims we will be looking to complete claims to 30st June in late June and early July.


Only employees who have been furloughed for at least three weeks by 30th June can be on furlough from 1st July. An employee who has completed a furlough period of three weeks (or more) and returned to work can go back on furlough after 1st July, but an individual who has not been furloughed previously cannot be put on furlough for the first time. The only exception is for employees returning from parental leave.

The final date for furloughing an employee for the first time was 10th June.

An employee who has been furloughed previously and returned to work, but is put on furlough again between 11th and 30th June must be furloughed full time for at least three weeks before they are eligible for the flexible furlough scheme and can be brought back on a part time basis. By way of example a previously furloughed employee who starts a furlough period on Monday 22nd June cannot undertake any work until Monday 13th July after which they may be flexibly furloughed.

Flexibility on hours

Subject to the eligibility criteria above, from 1 July a furloughed employee can work part time and be on furlough for the remainder of their contracted hours. There is complete flexibility and an individual can work whatever hours or shift patterns are required to meet the needs of the business.

It also means that from 1st July there is no minimum furlough period.

Limits on number of people that can be furloughed

From 1st July the maximum number of employees that can be on furlough cannot exceed the maximum number claimed for previously.

The intention is that the new flexibility in the scheme supports employees being brought back into the workplace, but the restriction needs to be considered carefully by businesses which have used rotating furlough patterns. For example a company which furloughed 10 employees for 3 weeks and then a different 10 employees for the next 3 weeks (and so on) could only have 10 flexibly furloughed employees on any one claim. This would prevent the entire team being brought back on 50% hours.

Submitting claims

Going forward, claims will need to be submitted separately for each calendar month. This is because the rules on the amounts which can be claimed change each month. The practical implication is that if you have staff whose furlough claims span June and July, separate claims will be required for each month, even if the staff have all been furloughed continuously.

It will be possible to make claims as regularly as once a week from 1st July, but claims should not be made before the business can be sure of the exact number of hours each member of flexibly furloughed staff will work during the claim period. In practice this will mean that it will often only be possible to make claims after the payroll has been finalised.

Calculating claims

The calculation of furlough claims will become more complex for those who are flexibly furloughed. We will be able to assist with this, but to enable you to estimate amounts in advance, the minimum which you must pay a flexibly furloughed employee is determined by following the below 3 steps:

  1. 80% of your employee’s usual wages; or The maximum furlough claim of £2500 per month or £576.92 per week
  2. Multiply by the employee’s furloughed hours
  3. Divide by the employee’s usual hours

This is the minimum amount you must pay your employee for the time they are recorded as being on furlough (‘Minimum Furlough Pay’). You can choose to pay more than this, but you don’t have to.

If any of the furlough hours are taken as paid holiday or annual leave, you need to top up the pay for these hours to the employee’s full contractual rate.

HMRC have provided a worked example of how to calculate Minimum Furlough Pay for an employee who is flexibly furloughed. Please click here.

Changes from August

Although this will be the subject of further updates, it is worth a reminder that from 1st August the furlough scheme will not cover employer’s NIC or pension contributions and that from 1 September the government contribution will be reduced to 70% of earnings and then to 60% of earnings from 1st October. The employer will still be required to pay 80% of normal earnings to furloughed employees.

Written agreement

Finally, it should also be noted that HMRC’s guidance states that you need a “new written agreement” to confirm the new (flexible) furlough arrangement.

Further details of the flexible furlough scheme are provided in HMRC’s updated guidance. Please click this link, and we remain on hand to answer any queries you may have.

Harts Office Remains Open

Our Macclesfield office remains open to clients for the collection and drop off of records and video conference meetings can be arranged.

Please feel free to call the office if you would like to arrange a meeting through your preferred contact.

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