Yesterday HM Revenue & Customs (“HMRC”) published further guidance on the Coronavirus Job Retention Scheme (“the Scheme”). The purpose of the Scheme is to reimburse employers up to 80% of the wages of employees (up to a limit of £2,500 per month) who have been put on furlough leave as a result of the coronavirus crisis.

The new guidance provides clarification around how the Scheme will work in practice. We have summarised some of the key new information below. However, we recommend exercising caution until the legislation is finalised because government guidance could be subject to change.

Key new information:

  • HMRC expects the Scheme to be up and running by the end of April 2020.
  • The Scheme will be open to all UK employers including businesses, charities, recruitment agencies and public authorities so long as they have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account. However, where employers receive public funding for staff costs and that funding is continuing, the Government expects employers to use that money to continue to pay staff and not furlough them.
  • Employees who have been on the payroll since 28 February 2020 on any type of contract, including full-time, part-time, agency and flexible or zero hour contracts are eligible. Any employees who were on the payroll on 28 February and have since been made redundant can be rehired and put on the Scheme.
  • Employers will be able to reclaim wage costs plus (not including) the employer’s National Insurance contributions and the minimum automatic enrolment employer pension contributions on that wage.
  • The guidance does not appear to preclude rotating employees on furlough leave provided that each employee is off for a period of at least three weeks.
  • Employees must not work at all during the period of furlough leave, however they are able to undertake training and volunteer work provided that they do not provide services to or make any money for their employer.

If you would like further advice on any of the issues around furlough leave, including drafting furlough agreements, please get in touch with our employment team.


For further support and advice relating to the impact of COVID-19, please view our COVID-19 Advisory Service page.

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