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What are the complexities around flexible furlough, should you be calculating in hours or days?

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Furlough before the 30th June?

For an employee to be eligible for flexible furlough, they must have been furloughed for a 3-week period during or before June. For this reason, HMRC gave a final start date for employers to enter an employee into the scheme as 10th June.

Flexible furlough from the 1st July

Some large changes where announce by the government, including that employers can leave employees on full furlough (80% of salary capped at £2,500), but also have the opportunity to bring employees back on a part time flexible basis, while stilling being able to claim for the period the employee does not work. If an employer decides to bring an employee back for this flexible arrangement it is imperative a new agreement is created stating that the employee will gain 80% of salary for the days they are not required to work. Recording this in payroll is not a walk in the park and we do advise you get in touch with one of our payroll team if you run into difficulties.

How to calculate flexible furlough?

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HMRC have instructed all calculations to be made using hours, not days

This is not particularly logical for a payroller, but these are the instruction HMRC have instructed we must follow; therefore, we must use the number of days per calendar month and calculate the amount of furlough hours and resulting pay.

Example: how to calculate from the start of flexible furlough on 1st July.

  1. Take the number of weekly contracted hours as at 19th March.
  2. E.g – 40 hours per week divided by 7 (calendar days in a week) = 5.71
  3. Multiple 5.71 x 31 days (July calendar days) – 177.14 always round up = 178
  4. From this answer deduct the number of hours the employee has worked during the month
  5. The remaining hours are the furlough hours!
  • Important – if the employee is being fully furloughed for July or even part of July the calculation method is the same as before, the full 80% of salary capped at £2.500 per month for the period they are on furlough.

What reports do HMRC require?

If you are claiming for employees that are flexibly furloughed, you will need:

  • The number of hours your employee is contracted for per week, during the claim period
  • The number of hours your employee has or will work within the claim period

A record must also be kept for the number of furloughed hours your employee has been furloughed in the claim period.

Employers responsibility

Employers must keep a copy of all records for 6 years, this includes:

  • The amount claimed and the claim period for each employee
  • The claim references number for their records
  • The calculations in case HMRC need more information about the claim
  • Usual hour worked, including any calculations that were required for employees flexibly furloughed
  • Actual hours worked for employees flexibly furloughed

If you have any queries about the above or would like advisory assistance through the process please get in contact with our specialist payroll team:

For more information on the furlough scheme to date please see the blow articles:

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