Home News FIS News COVID-19: Latest furlough update

On Friday 26 June, the Treasury issued a third Direction to reflect the introduction of flexible furlough and on 1 July HMRC updated its guidance to both employers and employees.

Key updates include:

  • The new guidance confirms that time spent on holiday can be included as furloughed hours rather than working hours for the purposes of calculating flexible furlough claims (although employees should not be put on furlough just to cover holiday periods).
  • Concerns have been raised regarding the introduction of new wording in the latest Direction which states the amounts paid under the scheme must be used “to continue the employment activities of employees in respect of whom the CJRS claim is made”. It is unclear whether this is simply a general comment or whether it is intended to exclude claims where employees are being made redundant.

What could this mean for employers?

  • The new wording in the Direction could mean that there are risks in claiming furlough subsidy for employees serving notice of redundancy as these sums might not be seen as being used to continue their employment activities.

So far HMRC has made no official comment on the matter and until such time as we receive confirmation on how this will be applied, it would be wise to check with HMRC before submitting claims covering these periods.

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