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You are here: Home » Latest News » Covid-19 » HMRC offers clarity on usual hours calculation for flexible furlough

HMRC offers clarity on usual hours calculation for flexible furlough


After some confusion regarding how flexible furlough should be calculated, HM Revenue & Customs (HMRC) has offered new guidance to help employers work out usual working hours.

In its initial guidance, HMRC said that to work out how much support a business is entitled to through its furlough grant claim calculator, employers must enter usual working hours and actual working hours for the claim period. The difference between these is the furloughed hours on which the grant claim is based.

However, initial confusion over how to calculate usual working hours for partially furloughed employees left many employers stumped.

Following requests from members of the accountancy profession for clarity, HMRC has offered further guidance based around the example of a person who works 35 hours a week and is paid on the last working day of each month.

It has said that employers “need to calculate the usual hours for each pay period, or part of a pay period, that falls within the claim period.” To calculate usual working hours employers should follow this example:

Step 1 – Start with the hours your employee was contracted for at the end of the last pay period ending on or before 19 March 2020 = 35

Step 2 – Divide by the number of calendar days in the repeating working pattern, including non-working days – 35 divided by 7 = 5

Step 3 – Multiply by the number of calendar days in the pay period (or partial pay period) you are claiming for (for July this is 31) – 5 times 31 = 155

If the answer isn’t a whole number then an employer should round up to the whole next number.

This seems to go against the thoughts of many, which for July would appear to be 23 working days (Monday to Friday days x 7 hours). HMRC has said that such calculations are wrong and should not be used.

HMRC has confirmed that the guidance to software developers which gave alternative answers is also out of date and should not be used.

HMRC’s latest guidance may mean that many employers receive slightly less than they may have expected if they were working on the expectations of an employee returning to work for a percentage of their usual working week.

If you are having issues calculating your grant for the flexible furlough scheme under the amended Coronavirus Job Retention Scheme (CJRS) rules then you should seek advice. To find out how we can help, please contact us.

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