Immediate change to CJRS usual hours calculations

14 September 2020: HMRC has updated its guidance on how to perform usual hours calculations where employees come off furlough or flexible furlough partway through a claim period. The change affects claims made from today.

When flexible furlough was introduced from 1 July, there was much confusion about how to calculate an employee’s usual hours.

Since then, it has emerged that further complexity can arise where some employees return to work from furlough or flexible furlough partway through a claim period. This can happen where an employer is claiming for multiple employees and some employees remain furloughed.

HMRC updated its guidance on 11 September 2020 to apply to claims made from 14 September 2020. It has added a new subheading: “Calculating the number of working and furloughed hours for an employee that comes off furlough or flexible furlough partway through a claim period.”

The guidance states:

“If your employee stops being furloughed or flexibly furloughed partway through a claim period, when calculating the number of furloughed hours you can claim for, make sure you:

• only calculate the employee’s usual hours up to the last day of furlough, instead of to the end of the claim period
• do not include any working hours after the last day of furlough.”

HMRC has clarified that employers do not need to amend claims made prior to 14 September, but they should use this calculation for any claims from 14 September 2020, for an employee who stops being furloughed or flexibly furloughed partway through a claim period.

HMRC has also updated example 3.3 in its guidance: “Examples of how to calculate your employees' wages, National Insurance contributions and pension contributions.”