Flexible furlough … the new rules released

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Flexible Furlough

So Friday evening we received further guidance on the flexible furlough (and there were pages of the stuff) so to condense this down and give you the answers, we’ve summarised this into the key information, and then key questions that have been asked.

There’s a new kid in town: flexible furlough

Move over ‘furlough’ for the new sassing ‘Flexible furlough’ which will help so many businesses get their staff working, but haven’t got adequate work to give them their usual hours.

So, from 1 July, employees can now go on the flexible furlough scheme and can now do work for you as their employer. Previously they could only take part in training, or volunteer or work for another company (if it was allowed in their contract). Whilst they’re working for you, for any amount of time or work pattern, you’ll pay their normal rate of pay for those hours worked, and for the time they’re not working they can be furloughed and you can claim a grant to cover these hours that are unworked.

Employees can remain fully ‘furloughed’ if you wish. But whilst on furlough they cannot undertake any work for you during the time that you record them being on furlough.

If you wish to use the flexible furlough, you’ll need to agree this with your employees, and keep a new written agreement that confirms the new agreement. Always bear in mind your employment, equality, and discrimination laws.

Remember to keep this record, plus your calculations for 5 years.

Who can I put on furlough?

Any employee who has been furloughed for a minimum of 3 weeks can be put on the flexible furlough system, although you cannot put more employees on than your maximum claim to 30 June. So say you made three furlough claims between 1 April and 30 June, and you claimed for 30 in April, 20 in May, and 50 employees in June, and you have 80 staff, at a maximum you can put 50 on the flexible furlough scheme.

And remember that employee must have been on furlough for at least 3 weeks to be eligible.

Also, bear in mind if you put employees back on furlough after 10 June, they cannot start the flexible furlough scheme until after their 3-week block has finished, for example say someone went back on furlough on 20 June, they cannot enter the flexible furlough from 1 July, but on 6 July.

So how do you calculate it?

I have taken HMRC’s example but made it a bit easier to follow. Take Dave, he works for Boris Limited, he’s worked for the company for 3 years, and on a contract for 40 hours a week. As at the last payroll before 19 March 2020 his usual hours were therefore 40 hours. He’s been on furlough since 25 April.

From 1 July he is asked to return to work half-days.

You work out the flexible hours by taking the 40 hours, dividing by 7 days. And in July we have 31 days so multiply that by 31 and voila you get 177.14 which we round up to 178.

So usually he does 178, Dave has actually worked 92 hours, and so the balance, 86, are his furlough hours.

So we take his last pay packet before 19 March, which was £3,000, as it was a full month we don’t need to play with the numbers, so we just take 80% of this which is £2,400. We check its below the £2,500 cap, and then we take the £2,400 divide by the total number of usual hours and multiple by the amount worked, so /178 x 86 = £1,159.55.

Assuming you need to pay NI, i.e. you have none of your employment allowance available, or you are not eligible for the employment allowance then to calculate NI, take this amount that you’ve worked out £1,159.55 deduct £353.66 (this is the amount that there is no NI to be added) and then simply multiply by 13.8%.

For the pension, you only pay pension over a certain band, £520, divide this by the number of days in the pay period (July) 31, multiply by the number of days your claiming which is 31 (as a full month), divide by 178 the usual hous, and the multiply by furlough hours = £251.24 this has altered the band for the amount of furloughed time.

Now take your grant, £1159.55 deduct the £251,24 and multiply by 3%.


We’ve created a spreadsheet to help, based purely on this guidance, but I’d recommend that you check this to HMRC’s website and your own workings. Drop us a line if you’d like a copy.

Right that’s the key information summarised for you, lets remind ourselves when Employers need to start contributing. 

Tapering relief away:

June, July will continue in the same way, with 80% met by the taxpayer (government), with a cap of £2,500. With Employers National Insurance and Pension being also met. Note, from July the new flexible scheme will mean you will have to pay employees for the hours they work.

August, 80% will still be met by the government, but employers national insurance and pension will be met by the employer.

September, 70% will be met by the government, employers will contribute 10% and also meet the employers national insurance and pension contributions. So the government will pay to the cap of £2,187.50 and employers will pay £312.50.

October, 60% will be met by the government, employers will contribute 20% and also meet the employers national insurance. So to the cap, £1,875 paid by the government, £625 by the employer).

You can still choose to top up.

Government Contribution        
Employers National Insurance & Pension Yes No No No
Wages 80% 80% 70% 60%
Up to £2,500 £2,500 £2,187.50 £1,875
Employer Contribution        
Employers National Insurance & Pension No Yes Yes Yes
Wages 10% 20%
Up to £312.50 £625
Employee receives 80% 80% 80% 80%

Now, lets tackle the questions:

Q. My employee hasn’t been furloughed can I claim? No, employees have to have been furloughed for a minimum of a 3 week period to qualify for the flexible furlough scheme. Unfortunately the 10 June was the latest point in which you needed to have put your employees on furlough in order to

Q. I want to put my entire team on furlough, can I do this? Only if all of your team were on furlough together at one point during this period, say for example you furloughed your full team at the start of furlough, and then after three weeks you started introducing a rota system and had brought back some of the team back. In this case, yes as the maximum claim you made was your full team. However, say you had 10 employees, and you started with a rota system of furloughing your team and claimed a maximum of 4 employees at any time, then only 4 employees at a time can be put on the flexible furlough scheme

Q. Like furlough, can an employee go on and off flexible furlough? Yes, from 1 July, agreed flexible furlough agreements can last any amount of time. Employees can enter into a flexible furlough agreement more than once.  Although flexible furlough agreements can last any amount of time, unless otherwise specified the period that you claim for must be for a minimum claim period of 7 calendar days.

Q. My employee has been on and off furlough, she went back on furlough on the 20 June, can she be moved onto the flexible furlough scheme from 1 July? No, she will have to maintain a full three week period on ‘fully’ furlough, and then start ‘flexible’ furlough from 3 weeks following 20 June, so in this example, 6 July she could start the ‘flexible’ furlough scheme.

Q. How do you claim it? You’re likely to be familiar with the furloughing system, or at least you would have put your employees on furlough by the 10 June for the last three week period.

Q. Will the government still meet 80% of the employees pay? Until September, the government will still meet 80% of employees pay, in August they will no longer provide you with the grant for the Employers NI and pension costs. In September they will ask you to contribute 10% and in October 20% and they will make up the difference so that the employee still gets 80% of their full salary. Bear in mind you must pay them their full rate of pay for days worked and holidays.


Q. I have an employee who is coming back from a long period of parental leave, can they be furloughed even though we missed the 10 June deadline? Yes, this is a specific exception to the rule.

Q. I receive public funding can I claim? If you have staff costs that are publicly funded (even if you’re not in the public sector), you should use that money to continue paying your staff, and not furlough your staff.

Organisations can use the scheme if they are not fully funded by public grants and they should contact their sponsor department or respective administration for further guidance.

Q. What are employees rights under furlough? Exactly the same, they still have the same rights at work, including:

  • Statutory Sick Pay
  • annual leave
  • maternity and other parental rights
  • rights against unfair dismissal
  • redundancy payments

Q. Can I make staff redundant after furlough? Yes. Being furlough does not guarantee an individual a job at the end of the furlough scheme.

But please remember, Grants cannot be used to substitute redundancy payments. Always seek professional HR advice when looking at making redundancies.

Q. I did my calculation incorrectly, and overclaimed, can I amend this? Yes, there is now a way you can amend this through the portal when you make your next claim. If you claimed too little, you have to discuss the underpayment with HMRC as they will want to do a few more checks.

Q. Will payments still only take 6 working days? Yes

Q. What payroll costs can I include? Can I include commission payments in the calculation? The amount you should use when calculating 80% of your employees’ wages is regular payments you are obliged to make, including:

Q. I have different employees on different patterns do I need to make more than one claim for that period? No. All claims should be included, and cannot overlap month ends now, see HMRC illustration.

Example of a first claim. This image shows an employer who furloughs 2 employees at the start of the pay period and a third a short time later. The claim is made 6 days before the end of the pay period, ensuring the grant is available to be paid out then.

Example of a second claim. This image shows an employer who makes a subsequent claim, 2 employees have been furloughed continuously since the first claim, and the claim periods follow on with no gaps in between the dates – though one returns to work before the end of the pay period. One employee worked for 2 days at the start of the second period, but is then furloughed again. The claim is made 6 days before the end of the pay period, ensuring that the grant is available to be paid out then.

Q. When can I make a claim? Up to 14 days before your claim period end date, so the end of the month. You can choose to match your claim period to the dates you run your payroll. I’d suggest that would be easier too!

You can claim before, during or after you run your payroll and do not have to wait until the end of a claim period to make your next claim. But it must not overlap with the previous claim period.

Q. My employee doesn’t work usual hours, how do I calculate?

So you would take the highest of the following:

– either the average over the last year so 2019 to 2020,
– or the same period this time last year so say July 2019.
So if we were calculating for July 2020. We take the number of hours worked during 6 April 2019 – 5 April 2020. Add them all up. Divide by the number of calendar days in that same period. Then round up. Then compare this to the number of hours in July, and take the higher.

Q. Where can I read all this stuff? All the links are below.




Here’s the link for the less standard bits such as agency workers, returning from maternity early to be furloughed, if an employee is on unpaid leave, self-isolating, if you’re a company director, and a nod to annual pay periods, employees transferred under TUPE, or a change in ownership,




Any queries on any of this please do not hesitate to get in touch with us here at Vibrant, contact us on the website, drop us an email at hello@vibrantaccountancy.co.uk or give us a call. We love a chat.

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