Updated Coronavirus Job Retention Guidance

HMRC has on, April 4th, published an update to the Coronavirus Job Retention Scheme. Shown below are the points which have been clarified from the original guidance a copy of which can be found here.

  • CLARIFIED: employees can start a new job when on furlough (meaning they might end up earning 80% of the old salary and 100% of a new one). This was not prohibited in the earlier guidance, but the new guidance expressly allows it. The guidance does say it has to be allowed under the old employment contract, but presumably, the old employer can waive that.
  • CLARIFIED: an employer can reclaim 80% of compulsory (presumably meaning contractual) commission back from HMRC, as well as basic salary. This is good news for car salesmen and estate agents. But it can only be referring to the commission from past sales as the furloughed employees cannot be completing new sales when on furlough. The cap of £2500 per month still applies
  • CHANGED: employers can reclaim 80% of fees (whatever that means) from HMRC. The previous guidance said they could not.
  • CLARIFIED: the 80% does not include non-monetary benefits (eg the value of health insurance or a car).
  • CLARIFIED Company directors can be furloughed. They can still perform their statutory duties, but not other work for the company.
  • CONFIRMED: Employees can be furloughed multiple times, ie they can be furloughed, brought back to work, then re-furloughed (subject to each furlough period being at least three weeks)
  • NEW: Employers must notify employees of their furlough status in writing (the previous guidance did not require it be in writing) and keep the record of that written notification for five years.
  • It is now even more essential to use a furlough agreement document. 

To repeat

All Employees can be furloughed if

  • They were on the PAYE payroll on February 28th
  • Provided the employer has enrolled for PAYE on line if not please use the HMRC or gov.uk website
  • The employee is a UK employee
  • The employer has a UK bank account
  • Apprentices can be furloughed
  • You the employer are receiving money from a public body to fund employment employers should not use that money to furlough employees
  • You can furlough individuals e.g. nannies provided they are on page
  • If you made employees redundant on or after 28th February you can reinstate them and furlough them this has risks for more information please contact me.
  • If an employee is self isolating or on sick pay their ssp will continue when they return to work they can be furloughed.
  • You can furlough shielded employees

Lots of areas remain unclear. For example:-

  • what do ‘statutory duties’ actually cover for company directors?
  • Are employees who TUPE into a business after 28 February covered?
  • can employees take annual leave when on furlough, and what should they be paid

This guidance will be updated as and when HMRC release more.


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