COVID-19: updated Guidance on the Coronavirus Job Retention Scheme

Please Note: All information correct at time of writing on 6 April 2020. We do our very best to make sure our information is as up to date as possible, but we’d encourage you to check out our latest articles and to check the government website for updates as they happen.

On Saturday 4 April, the government updated its guidance on the operation of the Job Retention Scheme.

Taking in the guidance as a whole, it seems to represent a slight shift away from being positioned simply as a scheme giving businesses an alternative to making their employees redundant,  to one which can be used where an employer cannot “maintain” their current workforce because their operations have been severely affected by coronavirus.

This may seem like a subtle difference, but it does call into question the potential use of furlough for employees where work is available but they are not able to undertake it as a result of coronavirus (such as shielded employees or those caring for children as a result of school closures).

We’ve taken a look at this updated guidance and summarised the key points businesses need to know, right here.

Who can claim?

In addition to having created and started a PAYE payroll scheme on or before 28 February 2020 and having a UK bank account, the business must have enrolled for PAYE online. This can take up to 10 days so any businesses who have not done so, should do so immediately.


Apprentices can be furloughed in the same way as other employees and they can continue to train while furloughed (but must receive at least the National Minimum Wage for the time spent on training and therefore the employer will have to top this up if it exceeds the 80% furlough subsidy). Further guidance on apprentices is available here.


Individuals can furlough employees such as nannies, provided they pay them through PAYE and they were on their payroll on, or before, 28 February 2020.


The guidance makes it clear that whilst administrators can access the scheme, they would only expect them to do so where “there is a reasonable likelihood of rehiring the workers”.

Employees who stopped working for you after the 28 February

It appears Martin Lewis has prevailed as the updated guidance reads:

“If you made employees redundant, or they stopped working for you on or after 28 February 2020, you can re-employ them, put them on furlough and claim for their wages through the scheme”.

This confirms that if employers wish to re-employ former employees and put them on furlough, they can recover their furlough pay under the scheme.

However, there is no obligation to do so and most employers will not want to re-employ individuals at a time of such uncertainty when they have chosen to leave the business, particularly if there is no work available.

After the scheme has ended, they would still have these individuals in their employment. Our advice remains that unless you really want a former employee back, it is probably best not to go down this road.

Shielding employees

There has been a lot of speculation that shielded employees may be able to claim furlough pay regardless of whether or not work is available.

The updated guidance states that if the employee is shielding in line with public health guidance (or needs to stay home with someone who is shielding), you can claim if they can’t work from home “and you would otherwise have to make them redundant”.

This seems a strange way of putting it as the reference to working from home implies there is work available (it just can’t be done from home) whereas the concept of redundancy is that work has diminished.

It’s unclear whether the guidance is referring to circumstances where they think an employer might want to make the employee redundant because they are unable to work during the shielded period but, legally speaking, this would not be a redundancy.

Employees with caring responsibilities

This has been added to the guidance and confirms that employees who are unable to work because of caring responsibilities can be furloughed – for example, employees who need to look after children. What is not clear is whether this is contingent on there not being work available.

Eligible individuals who are not employees

The updated guidance has clarified that the furlough grant can be claimed for any of the following groups if they are paid by PAYE:

  • office holders (including company directors)
  • salaried members of Limited Liability Partnerships (LLPs)
  • agency workers (including those employed by umbrella companies)
  • workers

Specific considerations are set out for these groups:

Office holders

For office holders, a period of furlough and any ongoing payment during furlough will need to be agreed between the office holder and the party who operates PAYE on the income they receive for holding their office. Where the office holder is a company director or a member of a Limited Liability Partnership (LLP), the furlough arrangements should be adopted formally as a decision of the company or LLP.

Company directors

As office holders, salaried company directors are eligible to be furloughed under the scheme. The guidance states:

“where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.”

In an exception to the rule that no work must be carried out for your employer during furlough, directors can carry out duties needed to fulfil their statutory obligations to the company “provided they do no more than would reasonably be judged necessary for that purpose, for instance, they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.”

The guidance confirms that these rules also apply to salaried individuals who are directors of their own personal service company (PSC).

Salaried members of Limited Liability Partnerships (LLPs)

The updated guidance confirms that the scheme also covers members of LLPs who are designated as employees for tax purposes (‘salaried members’). In order to do this, the terms of the LLP agreement may need to be varied by a formal decision of the LLP, for example, to reflect the fact that the member will perform no work in the LLP for the period of furlough, and the effect of this on their remuneration from the LLP.

Agency workers (including those employed by an umbrella company)

These workers can be put on furlough and covered by the scheme as long as they are paid through PAYE. The updated guidance states:

“Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them while they are furloughed, including for the agency’s clients.”

This is interesting in that it implies that work for another agency would not be prohibited by the scheme.

Where a worker is employed by an umbrella company, it is for the umbrella company and the worker to agree whether to put the worker on furlough.

Workers (also known as Limb (b) workers)

If they are paid through PAYE, they are covered by the scheme. If they are treated as self-employed for tax purposes (remembering that the tax system does not recognise the third employment status category of ‘worker’), they may be eligible to claim under the Self-Employed Income Support Scheme.

Volunteering and training

The updated guidance reiterates that volunteering and training are permitted when the employee is on furlough and goes on to say that “furloughed employees should be encouraged to undertake training”.

Retaining evidence of the agreement to furlough

The updated guidance stipulates that written evidence of the agreement to furlough must be retained for 5 years.

How much should you claim?

The figure claimed should be the 80% figure (subject to a maximum of £2500) rather than the 100% figure. Grants will be prorated if the employee is only furloughed for part of a pay period.

Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they’ve been written to confirming their furloughed status.

If the employee is on a salary, you should claim 80% of their salary as of 28 February, before tax. On this basis, we don’t think the claim should reflect this month’s increase in the National Minimum Wage and would be claimed at the previous National Minimum Wage rate. However, if paying holiday pay or if a training top-up is required, this should be at the new, higher level.

Other payments

There is some clarification on what additional payments can be included in the claim.

You can claim for “any regular payments you are obliged to pay your employees” – this includes wages, past overtime, fees and compulsory commission payments.

This does not include discretionary bonuses (including tips), commission payments and non-cash payments.

The reference to ‘past overtime’ is ambiguous and could be construed as overtime due having been worked previously, or a regular pattern of overtime. Until further clarification is given on this, it may be best to furlough on basic pay and explain to the employee that it is unclear whether an ongoing overtime element can be claimed but if it can, they will claim this and pay over the amount due.

Benefits in kind and salary sacrifice schemes

The scheme will not cover the cost of non-monetary benefits provided to employees, including taxable Benefits in Kind and benefits provided through salary sacrifice schemes (including pension contributions) that reduce an employee’s taxable pay. However, the guidance states that while normally an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event, HMRC agrees that COVID-19 counts as a life event which would justify a change to the arrangements if the contract of employment is updated accordingly.

Apprenticeship Levy and Student Loans

These should continue to be paid as normal and will not be recoverable under the scheme

Minimum period of furlough

The guidance confirms that individuals can be taken on and off furlough, but each period of furlough must be in a block of at least three weeks.

Working for a different employer

The updated guidance provides welcome clarification on this point. Employees can work for another employer when they are on furlough as long as this is permitted under the terms of their contract of employment.

Employers taking on a furloughed employee should complete Statement C in the starter checklist.

Questions about the Coronavirus Job Retention Scheme?

Now that the full government guidance on the scheme is here, it’s going to be a lot easier for businesses to establish their next step when it comes to protecting their business and their staff.

If you’re a Citation client and you’ve got questions about just how the Coronavirus Job Retention Scheme will apply to you, you can call our experts on our 24/7 advice line on 0345 844 4848.

Not yet a client of ours? You can give our friendly team a call on 0345 844 1111 to have a chat about where you’re at now and what we can help you get in place to get you through the next few months. Or, fill out your details in the form opposite and we can give you a call when it suits you.


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