Some 9.3 million people have been furloughed under the government’s Coronavirus Job Retention Scheme, the Treasury has revealed as the scheme closes to new entrants.
It said that by midnight on 28 June, £25.5bn in wage subsidies had been paid to employers.
From tomorrow (1 July) employers can only make claims for wage subsidies under the CJRS for employees who have previously been on furlough.
Flexible furlough
The only exceptions are employees who return to work from parental leave and military reservists who come back to their day job after completing a period of active duty. These groups can still be furloughed if their employer is already registered in the scheme.
From 1 July until the end of October, employers can bring back previously furloughed employees on a part time basis and claim a grant for the hours not worked.
Susan Ball, a partner at law firm RSM, said employers need to tread carefully when using the flexible furlough scheme.
“There is no doubt that CJRS has provided a lifeline for many businesses but it’s clear flexi furloughing has made it even more complex. There are traps employers could fall into depending on previous claims, how long they intend to furlough for and how employees are paid. It’s very likely genuine errors will happen, and employers will need to react quickly to make any corrections to timings, so they are not caught out,” she said.
Last week the Treasury issued its third Direction which establishes the legal basis for the operation of the amended scheme and sets out how to calculate furlough pay.
Organisations with employees who are paid monthly at a fixed rate can make a claim for the calendar month, provided they can keep track of hours worked.
For employees who are paid weekly, fortnightly or four-weekly on variable pay, the calculations and the timing of claims rely on records of hours worked both currently and in the previous year.
HM Revenue & Customs has also published guidance that sets out how employers can return scheme grants that had been overclaimed. Employers can either take into account the overpayments in their next claim, or make a payment to HMRC if they are not making another claim under the CJRS.
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