Why then does the HMRC calculator specifically mention the year 2021 when asking  "What would this employee’s usual hours have been between 1 March and 31 March 2021?" For the period of the claim the employer must enter: usual working hours, and; actual working hours. On 5 November 2020 it was confirmed that the furlough scheme had been extended until the end of March 2021. furlough calculations for fixed pay as at 19th March 2020, Explore our AccountingWEB Live Shows and Episodes, View our 2020 Accounting Excellence Firm Awards Finalists, IR35: Essential advice for your PSC clients, The changes to IR35 and off-payroll working, PPR relief if 2 houses one in UK one in France, Private sector IR35 reforms: Updated guide, Payroll and Covid: Growth and profit opportunities, Formulas to avoid sluggish payroll during COVID-19, Find the right balance between growth and service. The furlough scheme was due to end on 31 October 2020 and be replaced by the Job Support Scheme from 1 November. Part-time/flexible furlough: For each hour the employee works for you, you should pay them their usual salary, pro-rata (including all applicable NICs, pension contributions, and so on). The current furlough scheme. Stay up-to-date with the latest Coronavirus news: Sign up for daily news alerts. The difference between these is the furloughed hours on which the grant claim is based. For the period of the claim the employer must enter: The difference between these is the furloughed hours on which the grant claim is based. But it did throw me, and still does, when it specifically asks for 2021 hours, and did trip me up though in a moment of tiredness when I tried to rely on the calculator rather than my own interpretation. On 18 June, ICAEW’s Tax Faculty highlighted the confusion over how to calculate usual hours for partially furloughed employees for claims under the second iteration of the Coronavirus Job Retention Scheme (CJRS V2). So, if he'd've worked 100 hours normally, but only works 50, he'll get 50% of a full month's furlough money. This guidance is created by the Tax Faculty – recognised internationally as a leading authority and source of expertise on taxation. Thanks, but as far as I can interpret, even though an employee wasn't furloughed before 30th October, so long as that employee was "furloughable" or eligible to be furloughed prior to 19th March 2020, the furlough calculations are based on his employment and contract as at the pay date prior to 19th March 2o2o. Under flexible furlough your employer will pay for any hours you work, while the Government will pay for the remainder. FURLOUGH has helped keep people earning during the UK lockdown. Very many thanks for the suggestion anyway. If you do need to borrow money, your bank can likely work out an option for you to take out a small-installment loan with a flexible and low-interest payment plan. Number of days in employee's pay period * Number of days between end of pay period and date that paychecks are issued * First day of first pay period for which back pay is payable * First day of last pay period for which back pay is payable * Date on which back pay interest stops accruing * Outside Earnings HMRC system is broken Just confused now as to which one is correct, 112.7, or 63.8. The hours are to apportion the month's furlough between the hours worked (you get nothing for this) and the hours the employee would've worked if he wasn't furloughed. 6121(1)), or when the employee otherwise is no longer subject to an agency's flexible work schedule program. As far as I'm aware employees on a fixed pay as at 19th March 2020 are to have furlough calculated as at their salary and hours for the pay period just before 19th March 2020, so if their contracted hours change later in the year, their furlough is still based on their regular salary and contract for the tax year end 5th April 2020. It's not a fantastic system but it's not broken. HMRC has now confirmed that the following approach is the correct one, as applied for July 2020 to Bob who works 35 hours a week and is paid on the last working day of each month: HMRC's published guidance gives instructions for working out an employee’s usual hours for an employee who is contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work, as follows: "You need to calculate the usual hours for each pay period, or part of a pay period, that falls within the claim period. Why does it not ask for 1 - 31st March 2020? Under the scheme's rules, employers should pay time taken off during furlough with usual working rates. Yes, I'm calculating for flexible furlough, but it's the wording I still find confusing. HMRC confirms usual hours calculation for flexible furlough, Coronavirus Job Retention Scheme (CJRS V2), Core Accounting and Tax Service (Bloomsbury). Difficult to argue the calculations with employees who have used the calculator and are now disputing the furlough amounts. The calculator has already asked if the employees were on the payroll prior to 19th March 2020, so, if the contracted hours have changed since then, are we now to base the calculations for flexi furlough, not on 2019.20 tax year's hours, but the new contracted hours? ICAEW.com works better with JavaScript enabled. If you are only furloughed for the first time after 30 Oct (even if employed pre March) then you would use the October hours as the reference pay/hours rather than those at Feb. When calculating redundancy pay, their wage on flexible furlough must be topped up to 100%. 30 June: The day before flexible furloughing is introduced to the CJRS, HMRC has confirmed to ICAEW how usual hours should be calculated. But March 2020 for those not using Calendar months and filed before C Day. The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers from 1st March 2020 to 31st March 2021. I wonder what leniency HMRC will show towards employers who have used the calculator questions in good faith and at face value and may have inadvertently claimed too much? If I go by the question as per the HMRC calculator I should input 112.7 as hours which should have been worked, however, according to the rules for fixed hourly contracts, (so far as I know) I should be basing the flexi furlough calculations on usual … Furlough rates also don't apply to holidays, Prospect said. The minimum furlough pay is the lesser of either: 80% of their usual wage; the maximum wage amount; If your employee is flexibly furloughed the minimum furlough pay depends on … The answer is not the logical one, but it aligns with the published guidance. CJRS & BrightPay - Calculating & Processing Furlough Pay in BrightPay. Pay Periods and Interest Help. Round up to the next whole number if the outcome isn’t a whole number. It is designed to support employers whose operations have been severely affected by … They now work for 15 hours a week on full pay, receiving £10 an hour. They're put on flexible furlough on 80% pay for the remaining 15 hours, receiving £8 an hour. A full-time employee receives pay for a maximum of 24 unused credit hours at his or her current rate of basic pay when Federal employment ends, when the employee transfers to another agency (as defined in 5 U.S.C. Sign up to the Tax Faculty newsletter which provides weekly updates on developments in tax practice and policy. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business. But the second national lockdown, which began on 5 November, caused these plans to be scrapped. Key to getting the answers HMRC expects from its furlough grant claim calculator, are the hours that employers feed in. On pondering it further I think perhaps the HMRC calculator doesn't take into consideration that employees on fixed contracts might have had their contracted hours changed between last March and now. The employee has been employed since well before 19th March 2020. Multiply by the number of calendar days in the pay period (or partial pay period) you are claiming for. Regular hours at that stage were 14.5 weekly, though paid on a monthly basis. Divide by the number of calendar days in the repeating working pattern, including non-working days. The Institute of Chartered Accountants in England and Wales, incorporated by Royal Charter RC000246 with registered office at Chartered Accountants’ Hall, Moorgate Place, London EC2R 6EA. Thanks, I'm just confused as to why the calculator is asking for usual hours for period 1-31 March 2021, not 2020 as it should be able to interpret from the previous information that an employee on the payroll at 19th March 2o2o's hours should be based on 2020's contracted hours. However, the legislation covering the implementation of the CJRS has been published and, as with earlier debates about working versus calendar day calculations, HMRC is sticking to its position. Key to getting the answers HMRC expects from its furlough grant claim calculator, are the hours that employers feed in. "To calculate the number of usual hours for each pay period (or partial pay period)": The answer, confirmed by HMRC, is 155 usual hours in July for Bob. Seems odd but could it be to do with employees who have been employed pre March 2020 but weren't previously furloughed before 31 Oct? So is furlough still paid at 80 percent of an employee's wages, and will the scheme be extended? Following HMRC’s guidance means that for many employers the grant they receive will be slightly less than they may have expected if they were working on an employee returning to work for a percentage of their usual working week. HMRC has confirmed that the guidance to software developers which gave alternative answers is out of date although the Tax Faculty understands that it has not actually been withdrawn or superseded. Start with the hours your employee was contracted for at the end of the last pay period ending on or before 19 March 2020. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. This means they must receive £300 a week redundancy pay. Contract has since changed to 24.5 hours, which for March 2021 would equate to 112.7. Fixed pay goes back to the February 2020 figure for most people. It's only employees who weren't furloughable until a later date whose calculations are based on their pay at either 23rd September, or 30th October, whichever category they fall into. Sorry, I know I've asked this type of question before, but I'm still puzzled. The common sense answer, which you would get if you look at a calendar and count the hours, is 161 hours for July (23 working days Monday to Friday days x 7 hours), but HMRC has confirmed that this is wrong. 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