7th April 2020

Coronavirus: Updated guidance on the Coronavirus Job Retention Scheme

The updates are peppered throughout the original guidance, so it is recommended to read it in its entirety. Some of the key points to be clarified are as follows:

What you can claim 

  • You can claim for any regular payments that you are obliged to pay your employees. This includes “wages, past overtime, fees and compulsory commission payments”, so it would seem that an employer can reclaim 80% of ‘compulsory commission’ as furloughed payments from HMRC, as well as basic salary. However, as the guidance still exempts discretionary bonuses and commission, query whether this may only apply to previously earnt commission.
  • The 80% payment does not include non-monetary benefits (e.g. the value of health insurance or a car) and the reference salary should not include the cost of non-monetary benefits provided to employees.
  • Where employers operate salary sacrifice to provide benefits or pension contributions, those benefits (including pension contributions) that reduce an employee’s taxable pay should not be included in the reference salary. Normally, an employee cannot switch freely out of a salary sacrifice scheme unless there is a life event. HMRC has agreed that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements, if the relevant employment contract is updated accordingly.

New jobs and furlough

  • As we knew, employees hired after 28 February 2020 cannot be furloughed and claimed for in accordance with this scheme. The scheme allowed employers to re-hire employees that they had made redundant on or after 28 February and with a small amendment, this seems to have been extended to those who otherwise “stopped working for you on or after 28 February 2020”, as you can re-employ them, put them on furlough and claim for their wages through the scheme.
  • Employees can start a new job when on furlough without losing out on payments under the Scheme, though this remains subject to their existing contract and in many cases that will likely need the agreement of their existing employer, who may within reason be willing to waive any prohibition on working elsewhere subject to any conflicts etc.
  • Employees can be furloughed multiple times, i.e. they can be furloughed, brought back to work, then re-furloughed (subject to each furlough period being at least three weeks), which may assist where employers have categories of staff, some of whom are still working and wish to rotate those in the same roles within such groups.
  • Company directors can be furloughed and are able to still perform their statutory duties but not any other work for the company.
  • Employers must notify employees of their furlough status in writing and keep the record of that written notification for five years. This suggests any HMRC audit period may last for some time.

Unfortunately there are still some unanswered questions, particularly whether employees can take annual leave when furloughed and, if so, what they should be paid and whether that is reclaimable as ‘wage costs’ within the scheme.


Please note: Nothing in this article constitutes legal advice and we are not liable for any reliance on the information provided. This is a rapidly changing subject, and whilst correct at the time of writing, circumstances may have changed since publication. Please refer to Gov.uk for up-to-date advice on the Government’s response to this issue.

To find out more about anything covered in this article, or to discuss the potential impact of COVID-19 on your business, please contact Kerrie Hunt or another member of Thrings’ Employment and Immigration team.



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