07th April 2020

HMRC updated its guidance on the coronavirus job retention scheme over the weekend. While it has addressed some of the questions employers are asking, there are many which remain unanswered. Details of the scheme as originally published can be found here ( The key changes and additions to the previous guidance are as follows.

Who can claim?

Employers need to have enrolled for PAYE online. This can take up to 10 days so employers that haven’t done should enrol now.

Type of employee covered

The guidance clarifies that it is not just employees in the employment law sense that are covered by the scheme. Any of the following can benefit from the scheme if they are paid via PAYE:

– Office holders (including company directors)

– Salaried members of a Limited Liability Partnerships

– Agency workers (including those employed by umbrella companies)

– Workers

The guidance has separate sections dealing with each of these which employers should refer to where relevant. Directors will be able to carry out statutory duties without falling foul of the ‘no work’ rule, provided they do no more than would reasonably be judged necessary for that purpose. Apprentices are also eligible, so they can be furloughed. They can continue to train but must be paid the appropriate national minimum wage for time spent training.

Employees who left employment since 28 February

The previous version of the guidance indicated that employers could re-employ and furlough anyone made redundant since 28 February and claim for their wages under the scheme. The updated guidance extends this to any employee who stopped working for their employer on or after 28 February 2020. So the reason for leaving is irrelevant.

Fixed-term contracts

Employers can furlough employees who are on fixed-term contracts and they can renew/extend their contracts during the furlough period without breaking the terms of the scheme

Employees with caring responsibilities

Employees who are unable to work because they have caring responsibilities resulting from COVID-19 can be furloughed. For example, employees that need to look after children can be furloughed.

Employees who are shielding

Employees who are shielding (or need to stay home with someone who is shielding) can be furloughed if they are unable to work from home and they would otherwise have to be made redundant.

Can employees start work for another employer?

The guidance clarifies that an employee can start work for another employer while furloughed, if the employment contract allows this.

No work rule

Although not in the employer guidance, the amended employee guidance confirms that the prohibition on doing any work for their employer while furloughed includes working for a linked or associated employer.

Three week minimum and rotating on and off of furlough

The guidance confirms furlough must last a minimum of 3 consecutive weeks. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of 3 consecutive weeks.

What can be claimed?

Previously the guidance said that employers could claim for 80% of an employee’s regular wage but not for any overtime, fees or commission. This has been changed in the updated guidance. Employers can claim for any regular payments they are obliged to pay their employees. As well as wages, this includes past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips), commission payments and non-cash payments should be excluded, as should benefits in kind. Student loans and the apprenticeship levy must be paid as usual but grants under the scheme do not cover these.

Salary sacrifice

Where there is a salary sacrifice arrangement in place, the employer can only claim for the post-sacrifice salary. HMRC agrees that COVID-19 counts as a life event that could warrant a change to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.


The updated HMRC guidance says nothing about holiday and holiday pay during furlough. Acas also updated its guidance on taking holiday over the weekend and while it clarifies some things, others still remain unclear. The updated guidance indicates that:

– Furloughed employees can still request and take their holiday in the usual way. This includes bank holidays

– Furloughed employees can still be required to use a day’s paid holiday for bank holidays

– Furloughed employees who usually work bank holidays should check with their employer to see if they have to take that day as holiday or if they can take the time off at a later date

What remains unclear is:

– Whether employers can require employees to take holiday (other than bank holidays) while furloughed

– If an employee does take holiday while furloughed, what rate of pay they get when it comes to working out their normal remuneration for holiday pay purposes.

The Acas guidance does not say anything about either of these issues.