Furlough scheme "usual hours" calculation change

HMRC has updated its Furlough Scheme guidance on usual hours calculations where employees return from furlough or flexible furlough partway through a claim period. The change affects claims made from 14 September 2020.

When the flexible furlough scheme began on 1 July there was confusion on how to calculate an employee’s usual hours.

Various methods of calculation have been advanced, with HMRC providing some clarification.

There has, however, been further confusion where 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's updated guidance for claims made from 14 September 2020 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 further clarified that employers do not need to amend claims made before 14 September, but they should use this updated computation for any claims from that date 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.”