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CJRS: Flexible furlough HMRC guidance published

15 June 2020
Following the Chancellor's announcement that the Coronavirus Job Retention Scheme ("CJRS") is changing, introducing a new flexible furlough and employer contributions, the much anticipated guidance has been published providing the essential detail. 

From 1 July 2020 employers will have the flexibility to bring furloughed employees back into the workplace on a part-time basis and from 1 August 2020 employers will be expected to contribute towards the CJRS on an incremental basis until the scheme closes on 31 October 2020.

Key resources:

Coronavirus Job Retention Scheme summary page of guidance

Changes to the CJRS

Government CJRS guidance for employers

Check which employees you can put on furlough guidance

Steps to take before calculating your claim using the CJRS

Calculate how much you should claim

Claim for wages through the CJRS

Report a payment in PAYE RTI

Examples to help you work out 80% of your employees' wages - flexible furlough

Find examples to help you calculate your employees' wages


Some key points to note from the new and updated guidance:

Closure to new entrants – The Chancellor made it clear that the CJRS would be closed to new entrants from 30 June 2020, meaning the final date an employee could be furloughed for the first time was 10 June 2020, to allow for the minimum three week furlough period. However, on 9 June 2020, the government announced that parents returning to work after extended leave are eligible for furlough even after 10 June 2020.

Some key dates when making a claim – The first time employers will be able to make claims for July will be 1 July; employers cannot claim for periods in July before this point. 31 July is the last day that employers can submit claims for periods ending on or before 30 June.

Minimum furlough periods – From 1 July 2020 agreed flexible furlough agreements can last any amount of time. Employees can also enter into a flexible furlough agreement more than once. It is important to note that where an employee starts a new furlough period before 1 July 2020, this must be for a minimum period of 3 weeks, even if this takes the employee past 1 July. This means that there will need to be two claims for any overlapping claim of 21 days from 10 June onwards because of the need to claim on a month by month basis from 1 July. Although there is flexibility over the length of the furlough agreement, the period that employers claim for must be for a minimum claim period of seven calendar days.

Written agreement – The guidance states that "If you flexibly furlough employees, you’ll need to agree this with the employee (or reach collective agreement with a trade union) and keep a new written agreement that confirms the new furlough arrangement". The agreement must be consistent with employment, equality and discrimination laws. References to equality and discrimination laws is a change to the guidance. A written record of the agreement should be kept for five years which differs from record keeping on pay which is dealt with below. The guidance is also updated to reflect that you must tell your employee that you have made a claim.

Can employers still fully furlough? – Employers can continue to fully furlough; flexible furloughing is optional.

Calculating usual hours and furloughed hours – In order to claim under the CJRS employers will need to work out the employee's usual hours and record the actual hours they work as well as their furloughed hours for each claim period. The guidance on "usual hours" is detailed and quite complex. In summary:

  • Employees who have fixed hours and whose pay does not vary – The calculation is relatively straightforward and is based on the numbers of hours the employee was contracted to work at the end of the last pay period ending on or before 19 March 2020.
  • Employees who work variable hours – The usual hours are calculated based on the higher of either the average numbers of hours worked in the tax year 2019 to 2020 or the corresponding calendar period in the tax year 2019 to 2020.

Once the usual hours are ascertained employers will then need to calculate the number of working and furloughed hours for each employee. Employers must agree with the employee how many hours will be worked. The employee will be furloughed for the rest of their usual hours.

Employers will need to calculate 80% of their employees' usual wages to determine how much they can claim under the CJRS for the furloughed hours. HMRC has provide a worked example of how to calculate minimum furlough pay for an employee who is flexibly furloughed.

Record keeping – Strict requirements are set out in the guidance requiring employers to keep the following records for pay for six years:

  • the amount claimed and claim period for each employee
  • the claim reference number for the employers' records
  • the employers' calculations in case HMRC need more information about the claim
  • usual hours worked, including any calculations that were required, for employees flexibly furloughed
  • actual hours worked for employees flexibly furloughed

If employers make an error when claiming – a new section has been added to the Claim for wages through the CJRS setting out welcomed detail for employers on the process to follow should they have overclaimed or underclaimed under the CJRS. Considering the complexity of the guidance and the frequent updates this process provides a lifeline for employers. Queries are to be raised through Webchat preferably and there is a request that direct contact with HMRC is to be kept to a minimum.


Undoubtedly employers will be keen to utilise the flexible arrangements as the lockdown measures ease. With the focus very much on allowing and also encouraging Britain to get back to work, the flexible arrangement will allow employers to take a considered approach to returning to the workplace, however the rules are complex and lengthy. The short-term priority will be for employers to focus on the furlough agreement evidencing the arrangement.

It is important to note that from 1 August 2020 employers will be asked to contribute towards the cost of their furloughed employees' wages as set out in HMRC's summary document Changes to the CJRS.

14 day quarantine after returning from abroad

As well as grappling with the latest version of the CJRS many employers are also concerned as to the position of employees who need to quarantine for 14 days after returning from overseas. As summer holidays approach and airlines are starting to open up flights, this matter should be addressed by employers. Communication is key. Transparent messaging setting out the employer's position and reasoning is essential. Whilst the position is more straightforward for those who can work from home, it is less clear for those who cannot. Employers may require the employee to take additional annual leave or unpaid leave. As always, the contract of employment will need to be considered and employers may wish to seek to agree new contractual provisions and /or policies and procedures to deal with this predicament. It is currently unclear whether Statutory Sick Pay could extend to those self-isolating following a trip abroad. We recommend that employers make their policy on being available for work following holidays as clear as they can as soon as possible and prior to issues arising.

If you would like any further information with regard to the issues raised in this update please contact your usual DWF contact or another member of the Employment Team.

Further Reading