Job Retention Scheme – claim periods and flexible furlough

Job Retention Scheme – claim periods and flexible

HMRC are expected to update their guidance on calculating JRS claims for the period in which an employee returns to full time work.

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Partner, KPMG Law

KPMG in the UK


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Following discussions with HMRC, we understand that the method of calculating furlough claims for the period in which employees return to normal working is to be simplified. Employers should review the updated guidance when published and confirm the implications for their final furlough claims.

How does the calculation currently work?

Where during a claim period an employee was fully furloughed (i.e. did no work at all) and then returned to permanent full time work with no subsequent furlough planned, HMRC’s guidance currently requires them to be treated as ‘flexibly furloughed’ for the full claim period.

Employers therefore need to calculate the employee’s usual hours, claim the Job Retention Scheme (JRS) grant, and pay the furloughed employee accordingly with the hours worked after returning to normal working affecting the amount that can be claimed.

The ‘usual hours’ calculation can be complex, and for some employees will produce a figure that, counter intuitively, can exceed their normal contracted hours.

What’s expected to change?

We understand HMRC will amend their JRS guidance and calculator such that an employee who does no work at all during the first part of their final claim period, and then ends their furlough period, returning to normal working (i.e. with no subsequent furlough planned), will instead be treated as ‘part furloughed’ for that period.

What does this mean?

If HMRC’s guidance is amended as expected, this would mean the ‘usual hours’ calculation will not need to be carried out for employees returning to normal working as instead, the employer will only base the claim on the period they were fully furloughed. This would be a welcome simplification for employers.

However, the specific position will depend on HMRC’s amended guidance and, potentially, on the wording of specific flexible furlough agreements and how they have ended.

This prospective change is a reminder that employers must monitor HMRC’s published guidance to ensure their claims remain compliant.

We will publish further commentary on the specific changes in due course.

For further information please contact:

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