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Furlough scheme complication

New limit to number of staff on a claim after July 1st

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I've just read that it will not be possible to increase the overall number of staff included on a furlough scheme claim after July 1st. Is this definitely the case?

We have a situation where 3 people (out of 6) are currently on furlough.  Ideally the directors would like to put all staff on part-time hours after July as they have very different skills and roles.  So there would be 6 staff working, say 75%, instead of 3 staff full-time and 3 on full furlough.  The value of the claim would decrease as more staff would be working more hours.

But if it is not possible to increase numbers from 3 fully furloughed to 6 part-time furloughed after July then it would make more sense to furlough all 6 at once by 10th June and then bring them back part-time after 1st July.  The directors are not furloughed so would cover everything for 3 weeks. The business is in the hospitality supply chain so demand and workload is likely to be remain depressed for some months, and it will be very important to have support and flexibility for staffing.

Have I got this right?

 

Replies (14)

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By LW64
02nd Jun 2020 16:25

When you submit the claim you add basic details for each person.
I would assume that if someone had not been furloughed on or before 10th June for at least 3 weeks then they could not be part time furloughed when the scheme changes.

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By fawltybasil2575
02nd Jun 2020 17:22

@ nippy1 (OP).

You have it absolutely “right”, and your proposed plan to furlough all 6 employees is precisely how you should proceed (assuming it is feasible, as your question indeed suggests it is, from a workload/practicability etc. perspective).

As I have stated in another thread, I believe the Chancellor has failed to take into account how many businesses actually OPERATE: not allowing furlough claims for ANY employees [at ANY point in the FOUR months to 31 October 2020] unless those specific employees have been furloughed, for a minimum of 3 weeks, by 30 June 2020, could cause substantial disruption to many businesses, for no logical reason.

The purported grounds are that the Chancellor wishes to limit the Government’s outlay, in furlough claim payments in that 4 months, but he could devise one or more different methods of restricting that OVERALL outlay WITHOUT imposing that “employee-specific” rule: an employer night, for one of many different reasons, wish to furlough Employee A, instead of Employee B (perhaps on grounds of fairness: indeed he could find himself in breach of Employment Law requirements if he does NOT apply such fairness principle) but would be unable to claim furlough for Employee A if Employee A had, for any one of many reasons, been carrying out necessary employment duties which resulted in his not having been furloughed for the required 3 weeks up to 30 June 2020.

Perhaps Jim Harra can pin the Chancellor (metaphorically of course) in a corner, and persuade him to modify his intended plans (hopefully well before 10 June 2020): I live in hope (if not expectation).

Basil.

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By PandoraSleeps
02nd Jun 2020 17:28

I agree with everything Basil has said, but I feel a bit cautious. The purpose of the furlough scheme is to enable businesses to retain their employees rather than making them redundant. So if you furlough people with the reason of "so that we can claim for them part time later", rather than with the reason of "so that we don't have to make redundant as we otherwise don't have any work for them to do as a direct result of the coronavirus pandemic", perhaps the claim could be vulnerable to challenge. I suppose HMRC will be looking at how many new people get added to claims in June compared to March, April, May (when the lockdown restrictions were more severe).

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Replying to PandoraSleeps:
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By nippy1
02nd Jun 2020 18:17

I also feel a bit cautious about this; I think we have a strong case to explain and justify this but I don't want to open myself to any challenges.

This month, for example, a salesman is doing a bit of sales and a lot of financial admin (which he is not particularly suited to!) because it is not viable to have both him and the sales order clerk on full pay with limited revenue. But both roles are absolutely essential for the business to survive. If the part-time option had been available from the start, then this would have been far preferable. Over the next few weeks/months, the plan is for all staff to get back to work but there definitely won't be enough to keep them busy 5 days a week in their usual roles until the hospitality sector picks up.

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By legerman
02nd Jun 2020 20:13

Are you able to bring the 3 furloughed staff back to work and furlough the other 3 for the final 3 weeks of June?

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By Matrix
03rd Jun 2020 08:24

Provided all 6 have previously been furloughed then you can claim for part time furlough for all of them after 1 July.

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Replying to Matrix:
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By nippy1
03rd Jun 2020 10:15

They will all have been furloughed by the end of June, so this is not the issue. My concern is about the number of staff per claim. If each previous claim has only ever had 3 names on it, then - if my understanding is correct - it will not possible for make a future claim with 6 names on it, even if this is for part-time hours and for a smaller overall amount.

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Replying to nippy1:
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By Connie1
03rd Jun 2020 11:59

I agree with your understanding and we have been advising clients to this end too. In my opinion June’s claims will contain more people, and cost the government more, than would have been the case if this rule hadn’t been included. I have other clients who will make some previously furloughed employees redundant in July so as to “use the slot” to have more people on part time furlough. Sometimes they really don’t think things through.

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Replying to Matrix:
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By legerman
03rd Jun 2020 12:33

Matrix wrote:

Provided all 6 have previously been furloughed then you can claim for part time furlough for all of them after 1 July.

My thoughts too, but I misunderstood Nippy's question. Problem is we won't know the full criteria until the 12th June, by which time it will be too late if Nippy is correct.

Personally I think it would be very unfair if you had furloughed 6 employees but only 3 at a time and then found that you couldn't furlough all 6 on a part time basis and I don't think that will be the case, but I understand where Nippy is coming from.

Of course, what Nippy could do is furlough all 6 on the 10th June and change his/her mind on the 12th June if the fear is unfounded, bringing 3 back to work and not claiming furlough for them. It would cost 3 days wages x 3 so may not be viable but perhaps something to consider.

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By fawltybasil2575
03rd Jun 2020 12:56

@ nippy1 (your 10.15 post).

In your initial question you stated:-

" . . . it would make more sense to furlough all 6 at once by 10th June and then bring them back part-time after 1st July."

In the first sentence of my first response above, I said:-

" . . . your proposed plan to furlough all 6 employees is precisely how you should proceed."

Your 10.15 post today however then states:-

" My concern is about the number of staff per claim. If each previous claim has only ever had 3 names on it, then - if my understanding is correct - it will not possible for make a future claim with 6 names on it."

In intending no offence, I am not readily clear why you NOW envisage abandoning the original plan "to furlough all 6 at once by 10th June" (possibly you are just considering a change of plan).

However, to hopefully put the matter beyond doubt, and of course subject to the possibility of the Chancellor's amending his current plans (whether on 12 June 2020 or before) this is a link to the GOV.UK "Factsheet":-

https://assets.publishing.service.gov.uk/government/uploads/system/uploa....

If you would kindly scroll down to para (3) of the second factsheet (ie the "Coronavirus Job Retention Scheme Factsheet") and specifically the fifth bullet point thereof, you will note:-

"The number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim under the current CJRS".

Basil.

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Replying to fawltybasil2575:
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By nippy1
03rd Jun 2020 13:59

Thanks Basil! No, I am not changing my mind, but obviously I wasn't clear enough.

I was just responding to other posters who were suggesting that so long as all 6 had been furloughed at any point before 10/06/2020 then this was sufficient. But I don't think it is. I think there's a second constraint on the number of staff per individual claim which might easily get overlooked.

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Replying to nippy1:
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By fawltybasil2575
03rd Jun 2020 14:51

@ nippy1.

In response to your last post, I am compelled to say that you are most absolutely very definitely correct in your assessment of the situation.

I would add furthermore that, since I cannot recall that the "number of staff" aspect is in the MAIN HMRC guidance, this is one of the aspects which will cause heated correspondence between HMRC and businesses/accountants, in the not too distant future.

Basil.

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By pauljohnston
04th Jun 2020 09:31

As I understand it what Nippy has to do is furlough all his staff on 10 June and then on 12 June decide whether they should all be furloughed. You can then do your 1 July claiming 2 days for those that you decide on 12 June should be no longer furloughed.

Between 12th June and 1 July you can negoitate with those members you want to change the furlough arrangement.

Am I right?

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