Over this last weekend the Government set out further clarification of how the Job Retention Scheme is intended to work.

The update seeks to clarify some of the main queries HMRC has received to date. Whilst all the guidance has been refreshed, the main areas HMRC have focussed upon are:

  • more detailed information on scheme eligibility
  • further information on how to calculate a claim
  • clarification of what constitutes wages.

As previously, we must caution that whilst more detailed guidance is welcome, there remains uncertainties – not least in terms of the Government Portal and information that will be required to make your claim, etc. Presumably, we will know more soon….

Should you want to review the latest Scheme details yourself please follow this link


In the interim, we have tried to pick up some of the core detail provided in the latest announcement.


  1. When Can I Make My Claim?

The online service you will use to claim is not available yet – this is expected to be available by the end of April 2020.

You should make your claim using the amounts in your payroll – either shortly before or during running payroll.

If appropriate, worker’s wages should be reduced to 80% of their salary within your payroll before they are paid. This adjustment will not be made by HMRC.

Claims can be backdated until the 1st March where employees have already been furloughed.


  1. How Much Can I Claim? 

You can only claim for furloughed employees that were on your PAYE payroll on or before 28 February 2020, employees hired after 28 February 2020 cannot be furloughed.

Employees can be on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. Foreign nationals are eligible to be furloughed

  • To be eligible, when on furlough an employee cannot undertake work for, or on behalf, of the organisation; and
  • Remember that if an employee is working, but on reduced hours, or for reduced pay, they will not be eligible for this scheme.

You will be able to claim for:

  • 80% of your employees’ wages (even for employee’s on National Minimum Wage) – up to a maximum of £2,500;
  • employer National Insurance contributions on behalf of your furloughed employees;
  • Minimum automatic enrolment employer pension contributions on the subsidised wage;
  • Noting that
    1. Grants will be prorated if your employee is only furloughed for part of a pay period;
    2. Claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they were written to confirming their furloughed status;



  1. What Do I Need To Have To Be Able To Make A Portal Claim?

You must have:

  • your ePAYE reference number;
  • the number of employees being furloughed;
  • the claim period (start and end date);
  • amount claimed (per the minimum length of furloughing of 3 consecutive weeks);
  • your bank account number and sort code;
  • your contact name and phone number;
  • You will need to calculate the amount you are claiming.
  • HMRC will retain the right to retrospectively audit all aspects of your claim.


  1. Agreeing To Furlough Employees

Employers should discuss and make any changes to the employment contract by agreement.

  • When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.
  • To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. A record of this communication must be kept for five years.


  1. How Do I Work Out What Pay My Employee Is Due?

The way you work out your employees’ wages is different depending on what type of contract they are on, and when they started work:

  • Full or part time employees on a salary
    1. Claim for the 80% of the employee’s salary, as of 28 February 2020, before tax.
  • Employees whose pay varies
    1. If the employee has been employed for 12 months or more, you can claim the highest of either (1) the same month’s earning from the previous year; or (ii) average monthly earnings for the 2019-2020 tax year
    2. If the employee has been employed for less than 12 months, claim for
      • 80% of their average monthly earnings since they started work.
  • If the employee only started in February 2020, claim for
    • pro-rata their earnings so far, and claim for 80%

You can claim for any regular payments you are obliged to pay your employees:

  • This includes wages, past overtime, fees and compulsory commission payments.
  • However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded

Note that there is minimum furlough period that you can claim for:

  • Any employees you place on furlough must be furloughed for a minimum period of 3 consecutive weeks;
  • When they return to work, they must be taken off furlough.
  • Employees can be furloughed multiple times, but each separate instance must be for a minimum period of 3 consecutive weeks.


  1. What If I Am A Company Director – Can I Be Furloughed?

As office holders, salaried company directors are eligible to be furloughed.

  • 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.
  • Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so 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.
  • This also applies to salaried individuals who are directors of their own personal service company (PSC).


  1. Salaried Members of Limited Liability Partnerships

Members of LLPs who are designated as employees for tax purposes (‘salaried members’) are eligible to be furloughed and receive support through this scheme.

  • To furlough a member, the terms of the LLP agreement (or any such agreement between the LLP and the member) 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.
  • For an LLP member who is treated as being employed by the LLP, the reference salary for this scheme is the LLP member’s profit allocation, excluding any amounts which are determined by the LLP member’s performance, or the overall performance of the LLP.


  1. If Your Employee Undertakes Training

Furloughed employees can engage in training, as long as in undertaking the training the employee does not provide services to, or generate revenue for, or on behalf of their organisation.

  • Furloughed employees should be encouraged to undertake training.
  • Where training is undertaken by furloughed employees, at the request of their employer, they are entitled to be paid at least their appropriate national minimum wage for this time


  1. What If I Have Apprentices?

Apprentices can be furloughed in the same way as other employees and they can continue to train whilst furloughed.

  • However, you must pay your Apprentices at least the Apprenticeship Minimum Wage, National Living Wage or National Minimum Wage (AMW/NLW/NMW) as appropriate for all the time they spend training.
  • This means you must cover any shortfall between the amount you can claim for their wages through this scheme and their appropriate minimum wage.


  1. What If I Have An Employee On Unpaid Leave?

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


  1. What If I Have An Employee On A Fixed Term Contract?

Employees on fixed term contracts can be furloughed.

  • Their contracts can be renewed or extended during the furlough period without breaking the terms of the scheme.
  • Where a fixed term employee’s contract ends because it is not extended or renewed you will no longer be able claim grant for them.


  1. Former Employees Are Contacting Me – Do I Have To Re-Engage Them?

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.

  • They must have been on your payroll on 28th February 2020;
  • You are NOT obliged to accept an employee back onto the payroll – remember that they continue to accrue holiday and retain employment rights if you do re-engage so make sure you carefully consider why that employee left before re-engaging!


  1. If You Need Further Assistance?

If you do need further advice please e-mail one of the following in the first instance and we will get back to you as soon as we can.

Please note that we cannot advise further on when or how you go about making your claim – we are waiting that information too!