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15 April 2020

New batch of furlough guidance released by HMRC

Government releases further detail on its Coronavirus Job Retention Scheme

The Government has released another batch of amended guidance to the Coronavirus Job Retention Scheme (CJRS) over the bank holiday weekend and again yesterday (Wednesday 15 April).

By now, you'll be familiar with the key principles of CJRS and furloughing. Namely that employers can claim back 80% of the wages (up to £2,500 per month) of furloughed employees.

Since the very first announcement on 20 March 2020, there have been dozens of amendments and updates to various points.

The latest guidance is available at:

The key changes are as follows:

Which employees can you claim for?

  • The qualifying date, which is when the employee had to be on the employer’s payroll, has changed from 28 February to 19 March 2020 provided the employer had submitted real-time payroll data by that date. This is a huge change, bringing into scope many people who were unable to be furloughed because they had recently changed jobs.

  • The guidance on employees who are on sick leave has been significantly expanded. Previously, an employee who was on sick leave could not be furloughed. Now, the guidance has been updated so that employers can move long-term sick employees onto furlough and if people become sick while on furlough, they can remain on furlough. The guidance makes it clear that it shouldn’t be abused to “top up” small amounts of SSP for short term absences.

  • It is important to note that it is the employer’s choice as to whether they will put the employee on sick leave or furlough leave. If the employee is on sick leave then their salary cannot be claimed under the CJRS.

  • The updated guidance confirms that shielding employees can be furloughed and do not have to be placed on sick pay, regardless of whether they would “otherwise be made redundant” (this wording was in the previous guidance, but has now been removed),

  • We’ve also had clarification on how to calculate pay for employees returning from statutory leave (i.e. maternity leave, sick leave etc) should be calculated with reference to their salary, before tax, not the pay they received whilst on statutory leave. If an employee returning from statutory leave is on variable pay, the claim should be calculated using either the same month’s earnings from the previous year or average monthly earnings for the 2019-20 tax year.

  • The updated guidance clarifies that the 'no work' rule on furlough applies to work not only or the employer but also in relation to the provision of services for a linked or associated organisation.

  • For public sector organisations, the guidance contains a new section in relation to furloughing a contractor who is in the scope of the IR35 off-payroll working rules.

Who can claim?

If a Transfer of Undertakings (Protection of Employment) regulation (TUPE) transfer takes effect after 19 March 2020, those employees can be furloughed by the new employer.

Businesses that engaged in payroll consolidation schemes can place employees on furlough.

What can you claim?

The updated guidance clarifies that the reclaimable NI and pension elements are on the furlough salary rather than the normal salary (up to the level of the minimum automatic enrolment employer contribution).

Where the employer provides benefits to furloughed employees, including through a salary sacrifice scheme, these benefits should be in addition to the wages that must be paid under the terms of the CJRS. No part of the reclaimed grant can be used to fund benefits, and the entire grant must be paid to the employee. This means there can be no deductions for fees, administration charges etc.

The additional guidance continues to clarify points, and we expect to receive more until the scheme is finalised.

Contact us

Call Oliver Tasker at our Lincoln office on 01522 515 987 or email oliver.tasker@wilkinchapman.co.uk or

Katie Davies in our Grimsby office on 01472 253 917 or email katie.davies@wilkinchapman.co.uk

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