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Home > News > HMRC publishes further updates to the Job Retention Scheme

HMRC publishes further updates to the Job Retention Scheme

06 April 2020 | Cecily Donoghue

Cecily Donoghue, Solicitor in the Gregg Latchams’ team of Bristol Employment Lawyers reports on the updated guidance on the Job Retention Scheme issued over the weekend. Here are the new points and clarifications:

Eligible employers

HMRC has clarified that all employers are eligible. In relation to the staff that can be furloughed, it is not limited to employees who would otherwise have been made redundant, open to all staff whose employer’s operations have been severely affected by coronavirus, provided that the Employer:

  • Started a PAYE payroll scheme on or before 28 February 2020
  • Enrolled for PAYE online
  • Has a UK bank account


Apprentices can be furloughed in the same way as other employees and can continue to train whilst on furloughed. However, they must receive the Apprenticeship Minimum Wage for all the time they spend training, which means that some employers will need to cover the shortfall between the amount they can claim and the appropriate minimum wage.

Public sector / public funding

Where employers receive public funding for staff costs, and that funding is continuing, then the Government expects employers to use that funding and not furlough staff. This also applies to non-public sector employers who receive public funding for staff costs.

Similarly, organisations who receive public funding to provide services that are necessary to respond to the coronavirus are not expected to furlough staff. 

Individual employers

If you as an individual employ staff directly (such as nannies, cleaners, domestic support or carers) and pay these staff via PAYE and they were on payroll on or before 28 February 2020 then these staff can be furloughed.


If a company goes into administration and an “administrator” is appointed, then they can access the Job Retention Scheme, however this is only likely where the is a possibility of rehiring the workers.

Clarification on specific examples:

Previously resigned / or made redundant after 28 February 2020

You can re-employ such staff and then put them on furlough. However you should consider the following points prior to doing so:

  • We anticipate that their continuous employment would be retained and such staff may then acquire 2 years’ service;
  • Small risk that technically HMRC may determine that this is a fraudulent claim and not reimburse you;
  • Until the scheme is up and running then you have to fund their salary yourself unless the employee agrees to unpaid leave.

If your employees are working reduced hours

If an employee is working, but on reduced hours or for reduced pay, they are not eligible for the Job Retention Scheme. Whilst this is not expressly confirmed, we do not believe that this means that reduced hours staff cannot be subsequently furloughed if their role is no longer needed or if there isn’t further work for them to carry out.

If your employee is on unpaid leave

An employer can only claim for employees that started unpaid leave after 28 February 2020.

If your employee is self-isolating or on sick leave

Then they will be able to claim Statutory Sick Pay. Employers cannot claim for employee’s who are in receipt of SSP. However they could be furloughed once they are no longer receiving SSP.

Shielding employees

You can claim for furloughed employees who are shielding in accordance with public health guidance or those who need to stay home with someone who is shielding if they are unable to work from home.

Employees with caring responsibilities

Employees who are unable to work because they have caring responsibilities resulting from the coronavirus can be furloughed – for example staff who need to look after children or an elderly relative can be furloughed.

If the employee has more than one job

If an employee has two jobs, then they can be furloughed from each one and the £2,500 cap applies to each job.

We didn’t expect this, but an employee who has been furloughed can go and get another job in the same hours as their usual role and still be eligible for the scheme. However, this will be subject to their employment contract and many expressly prohibit this without employer consent. An employer could agree to vary / waive this, and permit staff to work elsewhere during their normal hours and it would be reasonable to do this.

Whilst this is helpful, this does seem to undermine the scheme by encouraging workers to travel and meet other people etc in finding new roles. However, we anticipate this is to allow workers to seek new jobs in those sectors where additional staff are much needed – such as essential workers. 

If your employee is on a fixed term contract

As set out before, these staff can be furloughed. Their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme. If however their contract ends and it is not renewed or extended then they will no longer be eligible.

Eligible individuals who are not employees

As well as employees, the grant can be claimed for any of the following if they are paid via PAYE:

  • Office holders – including company directors
  • Salaried members of LLPs
  • Agency workers – including those employed by umbrella companies
  • Limb (b) workers.

Further guidance on each of these is set out in the updated guidance.

Volunteer work

Employers can find staff volunteer opportunities, but of course, not ones that provide services to the employer or generate revenue for them.


Furloughed employees can be encouraged to undertake training as long as this doesn’t provide revenue or services to the employer.

If the employer requests that furloughed workers undertake training, then they will be entitled to be paid at least the appropriate level of the NMW, in some cases, the furlough payment will provide sufficient money to cover these training hours.

If an employee is on maternity / adoption / paternity or shared parental leave

The normal rules for maternity and other family related leave and pay continue to apply. Employers can claim for enhanced earnings related to contractual pay for employees who qualify for:

  • Maternity pay
  • Adoption pay
  • Paternity pay
  • Shared parental leave pay.

Agreeing to furlough and recording the decision

Remember that all employers should discuss and make any changes to the employment contract by agreement. Employers should not simply send an all staff email telling employees that they are furloughed as in the vast majority of cases, express written agreement will be required.

To be eligible for the scheme, employers must write to their employee confirming that they have been furloughed. A record of this must be kept for five years.

Claims date

The grant can be claimed for the date on which the employee starts furlough leave, not the date they are written to or the date the business made the decision to furlough staff.

What can be included in the salary that can be reclaimed?

The general calculations remain unchanged, but further clarity has been provided on the types of payments that can be reclaimed under the scheme. An employer can re-claim 80% of:

  • Wages
  • Past overtime – no further guidance has been given on what this means as staff will not be working so this is a little unclear, however it may refer to compulsory guaranteed overtime.
  • Fees – the last guidance excluded fees. There’s no definition of fees so we don’t know what this includes, but may be professional fees etc.
  • Compulsory commission payments – relevant for estate agents or other workers who mainly work on commission.

Further guidance has also been given on what cannot be included. The salary should not include the cost of non-monetary benefits including taxable benefits in kind. Similarly, benefits provided through salary sacrifice schemes (including pension contributions) should also not be included:

  • Discretionary bonuses – not included
  • Tips – not included
  • Discretionary commission payments – not included
  • Benefits in kind – not included, ie health insurance, company car etc. The value of this cannot be included in the amount reclaimed.

Where the employer provides benefits to furloughed staff, this should be in addition to the wages paid under the terms of the Job Retention Scheme. The Government has also confirmed that the coronavirus amounts to a “life event” which may allow staff to switch freely out of a salary sacrifice scheme, if the relevant employment contract is updated accordingly.

Minimum furlough periods

Employees can be furloughed multiple times subject to the 3-week minimum period.

Work during furlough

As set out previously, no work means no work. It is clear from previous guidance and has again been clarified now that staff cannot do any work that:

  • Makes money for the organisation
  • Provides services for the organisation

They can however take part in volunteer work (we assume that this does not include volunteer work for the employer) or training.

Should you have any questions regarding the furlough job retention scheme, or need assistance and guidance on implementing the scheme within your business, please contact Nick Jones or Cecily Donoghue in our employment team. Call 0117 906 9400 or email

Read the full guidance here

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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