How is the furlough system changing from 1st September?


From 1 September, the government will pay 70% of wages up to a maximum cap of £2,187.50 for the hours the employee is on furlough. Employers will pay ER NICs and pension contributions and top up employees’ wages to ensure they receive 80% of their wages up to a cap of £2,500, for time they are furloughed.

You can read more information about the changes.

Unless you’re making a new claim for an employee who is a military reservist or is returning from statutory parental leave, you can only continue to claim through the scheme if:

  • you have previously furloughed the employee for 3 consecutive weeks between March 1 and 30 June
  • you submitted your claim before 31 July


The government are weaning us off their furlough system and from August 1, employers will need to start paying employer national insurance and pension contributions for the hours the employee is on furlough (currently HMRC have been paying this as well). Employees won’t see a difference here, as HMRC will continue to pay 80 per cent of wages up to a cap of £2,500 for the hours an employee is on furlough.

And employers can also continue to top up employee wages to above the 80 per cent if they wish.

From September 1, employers will start contributing towards wage payments – with a 10 per cent contribution in September and a 20 per cent contribution in October.

As you may remember, earlier this month, Rishi Sunak announced that firms which bring back furloughed workers will be awarded £1,000 per employee as part of a jobs retention scheme bonus. This will be awarded in February apparently.

If you have any questions please contact or call 01763 257882

If you’re an employer who has been furloughing staff you will be aware that there’s changes afoot from July.

I will address these five questions:

  • Why it’s called flexible furlough
  • Who you can furlough now
  • How long can someone be furloughed
  • How to work out how much to claim
  • What admin and contract changes this scheme will need

As these elements are different for each month, I will just cover the immediate changes affecting July and will create new posts as we approach the following month.

1. Why’s it called flexible furloughing?

~The old system is for a minimum period of three weeks per employee. You can roll it forward and re-furlough them but you can’t do it for less than three weeks.

HOWEVER with the new system you will be able to do it for shorter periods from July 1st. You can furlough for a minimum period of a week

~With the old system, when someone is furloughed by your business, they cannot do any work for you (but they can for someone else as you will no doubt know).

From July 1st employees can work for you AND be furloughed in the same month.

You will need to pay them for the time they work and the government will subsidise up to 80% of the income to a maximum of £2500 per month for the time that they do not work.

The reason?

The government want you to start putting any staff you can feasibly employ productively onto a part time (or full time if the work is there) rota. And for the time they are not working, you will be able to furlough them, using the existing mathematical formula we’ve been using to date.

So that’s a cap of a maximum claim of £2500 per month per employee (plus, and don’t forget, for this last month only (July) the employer NI and minimum pension contribution) using the 80% of  their usual salary calculation.

2. Who can you furlough?

Hopefully you will have seen our guidance published in May, so you will by now know that you can’t add anyone new to the system from 10th June.

So with that in mind, the people you’ve already furloughed, who are in the system, are the same ones you can furlough moving forward.

If you’ve taken anyone new onto your payroll for example, you won’t be able to furlough them. Or if there’s someone who you’ve had on your payroll before 19th March and you’ve not furloughed, you can’t start furloughing them from July 1st.

THE EXCEPTION TO THIS is people returning from maternity/paternity/parental leave type situations. These returners can be furloughed even if they’ve not been furloughed before, but were ‘in your system’.


3. How long can you furlough them for?

This has changed, it was three weeks but has now changed to basically, whatever length of time suits you and your business, with a minimum period of seven days.

When can you claim?

Usually furloughing applications can be done up to 14 days before the pay run. And will be paid in six days.

With the new system from July 1st, you will need to create furlough applications which sit neatly in each month separately. So if the pay period straddles say end of July and beginning of August, you will need to include the July dates in the July claim and the August dates in the August claim.

What if someone is currently furloughed with dates straddling June and July?

You will need to claim for the June dates in one application and the July dates of that three week period in the July scheme. When that period ends, and if you want to continue using either the full or flexible furlough system, you will need to work to minimum periods of a week in general. There are exceptions if the dates are close to the end or start of a month. Details for that are here

You will need to continue to do it chronologically, so that June’s payment is done before you do July’s.

Your claim will need to include all your furloughed and flexible furloughed staff on the same claim. You need to make sure, if you claim up to 14 days ahead of the pay run that you are accurate regarding the number of hours worked.  If you claim in advance and your employee works for more hours than you have told us about, then you will have to pay some of the grant back to HMRC. If you make an error in your claim, you can find out how to correct it.

You should match your claim period to the dates you process your payroll, if you can. You can only make one claim for any period so you must include all your furloughed or flexibly furloughed employees in one claim even if you pay them at different times.

If you make more than one claim, your subsequent claim cannot overlap with any other claim that you make. Where employees have been furloughed or flexibly furloughed continuously (or both), the claim periods must follow on from each other with no gaps in between the dates.

4. How to work out how much to claim

You will need to keep accurate records for each employee for the hours they work and the hours they are being furloughed

Calculating the number of working and furloughed hours for each employee

You will have agreed how many hours your flexibly furloughed employee is going to work in the claim period. They will be furloughed for the rest of their usual hours.

To calculate the number of furloughed hours:

  1. Start with your employee’s usual hours.
  2. Subtract the number of hours they actually worked in the claim period – even if this is different to what you agreed.

If you claim in advance and your employee works for more hours than you agreed, then you’ll have to pay some of the grant back to HMRC. This means that you should not claim until you have certainty about the number of hours your employees are working during the claim period. If you make an error in your claim, you can find out how to correct it.

You must pay the employee their contractually agreed rate for any hours they work. Check the latest National Minimum Wage rates.

Find an example for calculating the number of furloughed hours.

Here’s the full HMRC guidance on the subject 


5. What will you need to do in addition to the calculations?

Using this scheme, the flexible furlough, will mean that you will need to agree and update all contracts of employment.

You will also have to write to your staff and explain how you expect the situation to affect them personally in terms of hours, role and responsibilities.

  • make sure that the agreement is consistent with employment, equality and discrimination laws
  • keep a written record of the agreement for five years
  • keep records of how many hours your employees work and the number of hours they are furloughed (i.e. not working)

N.B. The employee does not have to provide a written response


If you would like to read the official HMRC guidance on this please click here


If you’ve got any questions, please email

or phone us on 01763 257882

Happy to help, whether or not you are a current client.