Flexible furlough: Have you got it right?

23 July 2020

Stop press: On 2 October Government announced the last date for making claims under the CJRS will be 30 November 2020. More information to follow.

The Coronavirus Job Retention Scheme (CJRS) has supported 9 million employees and over 1 million employers with grants for furloughed employees. Furloughed employees must receive 80 per cent of their pre-furlough reference salary up to a maximum of £2,500 per month.

From 1 July, the rules changed and flexible furlough became available. Employers must (with limited exceptions) have furloughed the employee by 10 June. Employers can bring employees back to work for any amount of time, and on any work pattern, and can claim for any usual hours the employee is instructed not to work. To use flexible furloughing, employees need to have agreed not to work for the furloughed hours, and have supplied a written agreement to change contracted pay or hours terms in order to flexible furlough.

To be eligible for the CJRS grant from 1 July 2020, employers must continue to pay furloughed employees 80 per cent of their wages, up to a cap of £2,500 per month, for the hours they are furloughed. CJRS grant payments to employers for furloughed hours will taper per employee:

June and July: as above.
August: 80 per cent of wages up to a cap of £2,500 per month for furloughed hours Employer will pay ER NICs and pension contributions.
September: 70 per cent of wages (up to a cap of £2,187.50) for furloughed hours. Employers will pay ER NICs and pension contributions and 10 per cent of wages.
October: 60 per cent of wages (up to a cap of £1,875) for furloughed hours. Employer will pay ER NICs and pension contributions and 20 per cent of wages.

The job retention scheme cannot be used for redundancy payments - its integral purpose is to continue employment. Find more information on workforce planning and collective consultations here.

What is the price of getting CJRS wrong?

  • Legislation planned allows for a 100 per cent tax charge on incorrect claims not returned or reported to HMRC in a set timescale plus penalties.
  • HMRC will consider criminal prosecution with penalties of up to 10 years in prison for fraudulent claims.
  • HMRC audits requiring records retention for six years (the furlough agreement for five years or until 30
    June 2025).
  • Auditors, shareholders, audit committees, directors, trustees or pensions trustees will require assurance that CJRS claims and associated payments are correct.

What are some common CJRS mistakes?

  • Furlough agreements unfit for purpose.
  • Employees only on furlough leave whilst on holiday.
  • Calling furloughed employees back to work for emergencies without claims adjustment.
  • Employers expecting CJRS to fund all redundancy costs including PILONs.
  • Invalid earlier furlough period preventing furlough claims after 1 July.
  • Incorrect calculations resulting in for example underpayments to employees’ pensions funds.
  • Making employees settlement offers on termination through extending notice periods served on furlough.

How can RSM help?

Furlough agreements review and updating for flexi-furloughing.


Support to make employment terms changes


Holiday planning to meet both CJRS claims and annual leave requirements.


Assistance with claims reporting, reviewing and corrections submissions to HMRC. 


Reviewing that furlough procedures support the claim requirements. 

    Assistance with making sure all parties are paid the correct amounts including employees and pensions schemes.  
    Redundancy costs structuring with CJRS support.  

For more information, please contact

Carolyn Brown Carolyn Brown

Partner, Head of Client Legal Services

Susan Ball Susan Ball


Charlie Barnes Charlie Barnes

Legal Services Director