Job Retention Scheme (Furlough) FAQs (29/05/2020)

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Ed Hussey - Menzies Accountant

Ed Hussey –
People Solutions Director
DD: +44 (0)1784 497105

Andrew Brookes - Menzies Accountant

Andrew Brookes –
Employer Solutions Specialist
DD: +44 (0)1252 541244

We have listed below the most common questions we have received in connection with the Job Retention Scheme and have provided generic answers that will hopefully help to address some of your concerns.  This is not an alternative to taking bespoke advice that considers the specifics of your circumstances and your employment contracts and we would always advise that you take appropriate advice before acting.

Further information is still to be released by the Government, but these FAQs have been updated for the additional information released to date.  In the absence of full detailed government advice, some of the following is expressed views and assumptions in some areas as indicated, so please take care.


CJRS update following the Government update 29/05/2020

On 29 May the Chancellor confirmed some details of his plans to a) extend the furlough scheme to 31 October 2020, b) introduce the possibility of ‘part time’ furlough to help employers bring back their staff gradually, and c) taper the amounts that can be reclaimed, asking employers to make a contribution.

Please see further details of these arrangements here:

These updates are crucial for the gradual re-introduction of staff / teams and will play a significant part in the lockdown exit strategy planning for businesses. (this is a link to the Exit Strategy article)

Information on this FAQs page continues to be relevant, but is being updated to reflect the new arrangements.

Click the below links to jump to each section

Key questions relating to updated Government guidance issued ON 29th May 2020

Do the latest changes mean that I can’t put anyone new on furlough from 1 July?

Added 29/05/2020

Yes. The deadline for employers to be able to furlough new employees is 10th June. This is to allow a full 3-week furlough period to be completed by 30th June as this is when the scheme will close to new entrants. The initial guidance states that you will be able to still furlough employees after 30th June, providing that they have already completed a full 3-week furlough period prior to this date.

Will there be any other restrictions on who I can furlough from 1st July?

Added 29/05/2020

As well as not being able to furlough those who have not completed a previous 3-week furlough period by 30th June, you will also now be limited in the total number of people you can claim for in a period.

The number of employees an employer can claim for in any claim period will not be able to exceed the maximum number they have claimed for under any previous claim under the current CJRS.

Why is there a deadline of 10 June?

Added 29/05/2020

The 10th June is now a key date when considering placing employees on furlough leave for the first time. The scheme will be closed to new entrants on 30th June and those who have not already completed the minimum 3-week period by this date will not be eligible. Therefore, 10th June is now relevant as it is the last date that allows for the completion of the 3-week furlough period before the scheme closes to new entrants.

You will not be able to furlough any employees for the first time after 10th June.

If someone was on furlough and then brought back to work, do I have to get them on furlough again by 10 June in order to continue with their furlough beyond 1 July?

Added 29/05/2020

No, the initial guidance indicates that providing they have completed a full 3-week furlough period by 30th June, they will be able to be placed back on furlough leave at any time whilst the new scheme is still open.

This is only an interpretation of the current guidance and further clarity may not be available until 12th June. We would therefore advise a cautious approach.  If you need to keep your options open and ensure you can re-furlough currently working employees from July onwards, you may need to ensure they are furloughed again by 10th June through to the end of the month to ensure they qualify for the rest of the scheme.

Does this new deadline mean that I need to notify HMRC who is on furlough leave before 10th June?

Added 29/05/2020

Claims made for all periods of furlough up until the end of June must be submitted to HMRC via the portal by 31st July 2020.

The 10 June deadline refers to the last point at which new entrants must start their first period of furlough leave, not the date by which HMRC must be notified.

It remains essential that agreement is sought on any period of furlough leave, and that this is confirmed in writing and agreed with the employee.

What is meant by ‘flexible furloughing’, and when can I start to implement this?

Added 29/05/2020

The Government has confirmed that from 1st July, a month earlier than previously advised, employers will have the flexibility to bring back furloughed employees on a part-time basis whilst still benefiting from the financial support. This means that there is no longer the same restriction on furloughed employees undertaking work. There is still a requirement, however, to ensure that any flexible furlough agreement is confirmed in writing and agreed with the employee.

The employer will be responsible for paying the wages on the days that are worked and will still be able to claim for wages on days of ‘furlough leave’. Further guidance on this will be issued on 12th June.

How much will employers need to contribute going forward?

Added 29/05/2020

In terms of employer contributions, the scheme will remain unchanged for June and July. Then follows a gradual introduction of required contributions by the employer:

  • July – claims to be paid in full, although there will be changes to reporting requirements necessitated by the flexible hours scheme.
  • From 1 August until the end of the scheme on 31 October 2020 – employer NI and pension contributions can no longer be claimed.
  • From 1 September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work; but employers are still required to pay 80% of wages up to a cap of £2,500 per month.
  • From 1 October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work; but employers are still required to pay 80% of wages up to a cap of £2,500 per month.
  • The cap on the furlough grant will be proportionate to the hours not worked, under the new flexible scheme.

How do these changes affect annual leave taken during furlough leave from 1st July?

Added 29/05/2020

We are still awaiting clarification on how annual leave will be treated in terms of what can be claimed from HMRC from July. We do know that employers currently have the ability to request employees take holiday during furlough and only need to top up the payment by 20% to full pay.  This continues to the end of June.

It is possible however, that from July 1st, all costs relating to annual leave will need to be covered by the employer and there will be no option to re-claim this through the scheme.

Therefore if you want your furloughed employees to use some of their accrued annual leave while they are on furlough, you may wish to ask them to do this before 30 June.  Please be aware that there is a requirement to give notice to employees before enforcing this. The length of notice needs to be twice the duration of the holiday you want them to take, (so two weeks ‘notice for a one-week period of holiday), and it is likely that you need to consider giving notice now.

The CJRS claims process

How do I apply for the support?

Updated 19/04/2020

The initial guidance suggested that very little information was required. Perhaps given the change in attitude towards the prospect of fraudulent claims, this has been significantly increased and the Government has now said to claim, you will need:

  • your employer PAYE reference number
  • the number of employees being furloughed
  • National Insurance Numbers for the employees you want to furlough
  • Names of the employees you want to furlough
  • Payroll/works number for the employees you want to furlough (optional)
  • your Self-Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number
  • the claim period (start and end date)
  • amount claimed per employee (per the minimum length of furloughing of 3 consecutive weeks)
  • your UK bank account number, sort code and account holder name
  • your contact name
  • your phone number
  • You will need to calculate the amount you are claiming.
  • For smaller employers (less than 100 employees) this information must be keyed into the portal.  Employers with more than 100 employees will be able to upload a file with this information.
  • Your calculations must be retained for 5 years and made available to HMRC on request.

Menzies LLP can assist you with these claims, but you may need or prefer to submit the claim through your own Government Gateway account.  We therefore recommend that you apply for this quickly if you do not already have one and that you know your login and password if you do already have one.  This will minimise the risks of delays if your agent is prevented from submitting the claim on your behalf or must submit a significant number of claims, especially given the increased information required to make the claim.

What is the timescale for the portal and payment by the Government?

Added 20/04/2020

The Government have released the portal this morning.  However, it may not be appropriate for all businesses to make a claim today.

In terms of timing of payments, the updated guidance indicates that funds will be cleared in the employers UK bank account 6 days after the claim is submitted.

(Please see the FAQ on what to consider in paying employees on time or waiting for the grant from the Government).

Should I pay my employees’ next salary or wait to get the grant?

Added 02/04/2020

If your cash flow forecast allows, pay them and – provided you have your furlough agreements in place with your staff – back date your claim to cover the payments made (or part thereof, if you are topping up the grant).  If you do not have the available cash; and can’t get sufficient relief from the other facilities on offer to ease your cash flow, you will have to agree with your employees that it will be paid on receipt from the government.

Employers will be able to use the portal to claim funds from the Government at the time of, or shortly before, preparing the RTI submission.

What earnings will be included when making claims?


Regular past overtime can be included in claims along with wages, fees and compulsory commission payments.

Discretionary bonuses, tips, commissions and non-cash payments should be excluded. Apprenticeship Levy and Student Loans must continue to be paid and are not covered by the Scheme.

Should I submit a claim to the portal as quickly as possible?

Added 20/04/2020

This will depend on your circumstances and you should consider factors such as: how long since you furloughed staff; how long before you run the payroll again; do you have all of the information to hand; is it more cost effective to wait so you only incur costs for fewer claims; what is your cashflow position; etc?

I started furloughing employees a few days ago, when can I submit my first claim?

Added 20/04/2020

The guidance is a little vague, with some parts suggesting that you need to wait until at least your earliest furloughed worker has been furloughed for 3 consecutive weeks.  We believe that you can make a claim that includes workers who have not been furloughed yet for 3 weeks, but you will want to be certain that all of your furloughed workers you are claiming for will complete the minimum 3 week furlough because there is no ability to amend claims and therefore no simple way of remedying the situation where a claim becomes invalid because the employee returns to work before the 3 week minimum period has been completed.

I am due to run the next payroll in a week or so, should I hold off my claim until I run that payroll?

Added 20/04/2020

By waiting until you are ready to run the next payroll you maximise the amount of the claim at this time.  If you claim now then it may be another 3 weeks before you can claim for next week’s payments.  The guidance suggests the claim will be submitted as part of or shortly before the RTI completion.  This suggests you cannot project too far into the future for payments you want to include in the claim.

I do not have National Insurance numbers for some new furloughed employees.  Can I submit a claim now for everyone else and catch up with these employees on the next claim?

Added 20/04/2020

No, the guidance suggests each claim must cover the full amount for all employees.  Therefore. if you submit a claim excluding some employees because you do not have all of their information at the moment then you lose the ability to claim for these employees for this period.  Providing you have all the information by the time of the next claim then you can add them to that claim but only for that claim period, not the first claim period from which they were admitted.  Obviously there is a trade off here between a reduced claim or a delayed claim and you will decide on the basis of the amounts involved and how badly the funds are required.

Not all my furloughed employees have completed three weeks yet, should I hold off claiming until they have?

Added 20/04/2020

You will want to be certain that all of your furloughed workers will complete the minimum 3 week furlough period before you claim for them because there is no ability to amend claims and therefore no simple way of remedying the situation where a claim becomes invalid because the employee returns to work before the 3 week minimum period has been completed.  You will know whether this is a real risk or not and will make your decision on whether to delay the whole claim, or to include them on a claim now, based on the likelihood that furloughed employees will be reintroduced to the workforce early.

Can I amend my claim later if I want to add more employees?

Added 20/04/2020

No, there is no mechanism to amend returns so you should not submit a claim until you are ready unless you are prepared to lose the ability to claim for some employees for this claim period.

Your current situation – does the scheme apply to you?

We do not have enough work to keep all employees occupied – should we put the employees on short hours, make some redundancies or use the Coronavirus job retention scheme to furlough some?

Added 30/03/2020

This will depend on the specific business circumstances, but commercially the starting point is likely to be utilising the Coronavirus Job Retention Scheme in preference to either reducing hours or making employees redundant because this is the only option that currently secures financial support from the Government.  In many cases, furloughing some workers and retaining others on a full-time basis is the best commercial choice.  However, this may not be practical, for example where each employee has unique skills and taking any of them out of the workforce puts the business in a position where it is unable to operate.  In these circumstances, short term working may be the only option, but this will not secure Government financial support. You should ensure the employment contracts allow for this and you have employee agreement to reduce the risks of being taken to an employment tribunal.

How do I determine whether the business qualifies for the Government support under the Scheme?

Updated 19/04/2020

The scheme is  for “employers whose operations have been severely affected by coronavirus (COVID-19) to retain their employees and protect the UK economy. However, all employers are eligible to claim under the scheme and the government recognises different businesses will face different impacts from coronavirus” As a general start point, you should determine what you need to do as a business in order to survive during this period, separate to any consideration of the Scheme.  If staff lay-offs or redundancies are financially unavoidable, we would expect you to be covered given the aims of the Scheme.

Please be aware that there are restrictions for public sector employers, private sector employers that receive public funds for staff costs and private sector employers that are providing goods and services to meet the COVID-19 needs.  While there will be some exceptions to the exclusion, if you potentially fall within these restrictions, please consider your position carefully before furloughing employees.

The scheme is not up and running yet – what should I do in the meantime?

Updated 20/04/2020

The portal has been released this morning but it may not be appropriate for you to submit a claim today. You should take the action that is necessary for your business, bearing in mind that the Job Retention scheme is available and can apply retroactively.  So, consult with your staff and seek the agreements you need to ‘furlough’ them under the government scheme.  If you were considering full redundancies or layoffs, consider using the furlough option instead.  Consider your cash flow situation for your next payroll, based on the 80% of salary (capped at £2500) that you can receive back as a grant.  Decide whether you can top up salaries and to what level (if at all) and confirm the arrangements in writing to your employees.  Then determine whether your cash flow will enable you to make payments on time as part of your normal payroll cycle, or whether you will need to defer payment until the grant can be claimed and received before paying your employees.  You must inform and agree with them if payment is to be delayed.

Can I decide which employees are to be furloughed and which will continue working?

Updated 06/04/2020

Yes; this will depend on the circumstances so you can for example retain the staff whose roles or skills are required for the remaining work while furloughing those whose jobs or skills are not needed due to the downturn in work.  If you need to furlough just a few out of a group that all do the same work, you should consult with the staff and approach it in a similar way to a redundancy decision.  You may find that they provide a solution e.g. because some may prefer to be furloughed because they will have difficulty working remotely, whereas others may wish to remain working.  It is also considered appropriate under the scheme to furlough employees who have childcare or other caring responsibilities who may be finding it difficult to work from home.

The minimum period of furlough for an employee is 3 weeks.  Other than this you can bring people back from furlough or furlough more employees as work levels vary.  The same employee could be furloughed more than once providing each furlough period is at least 3 weeks long.

What can I do if I am in the process of making employees redundant – can I change my mind and opt for the job-retention scheme instead?

Confirmed & Updated 15/04/2020

The job retention scheme is intended to cover the situation where an employee would lose their job because of the Coronavirus.  The purpose of the scheme is to ensure the business can resume activities immediately the issues are overcome and to allow you to retain your workforce.  If the crisis means that your business has no work for some or all your employees and the alternative would have been considering redundancies, then the scheme applies.  You do not have to retain employees under the job retention scheme in circumstances where the employee was going to be dismissed anyway and there is no intention to retain them in the business moving forwards.

Where you have already laid off, or are considering making employees redundant due to coronavirus, providing they were employed and appeared on an RTI submission on or before 19 March 2020 (previously 28 February 2020), you can convert their lay-off status to furlough and return them to pay under the terms of the scheme.

What if I have made employees redundant – can I change my mind and bring them back on the job-retention scheme instead?

Confirmed & Updated 15/04/2020

If the ex-employee was employed by you on 28 February 2020 then it will be possible to switch to the job retention scheme. Any termination prior to that date will not be included in the scheme.

If you take back a previously employed worker, be clear at the start what the possible outcomes might be for them when the furlough period ends. If you are re-engaging them only for the duration of the scheme and their employment will not continue beyond this, then it would be prudent to have a written and signed agreement to reflect this.

If you choose to re-engage an employee that you recently made redundant, take time to consider what arrangements you intend to make relating to any termination payments that they will have received (statutory redundancy pay, PILON etc.).  There is no clear guidance on how to approach this yet, so our pragmatic suggestion is that you may wish to re-engage them only for the period of the furlough grant, with no longer term promises at this stage.   If you end up being able to retain them permanently, you can then discuss repayments at this stage rather than at the point at which you re-engage them. If unfortunately, you must release them when the scheme closes, then they will already be in receipt of the relevant termination payments.

What are my options where I have four employees but only enough work for two?


Reducing the hours of all the affected employees is not possible for the purposes of the job retention scheme.  The job retention scheme could however be used to furlough two of the employees while retaining the other two in the business. Please follow our advice for consulting and selecting fairly any employees to either furlough or continue working.

Is it possible to alternate the staff members furloughed so they do one month on and one month off?

Updated 03/04/2020

One of the most frequent questions since the scheme was first announced was whether you could rotate employees on furlough or if you must choose some employees to be furloughed while others stay at work. The HMRC employer guidance is unclear on this point; but says a) employees can be placed on furlough more than once and b) the minimum length of furloughing is three weeks.  It is also of course possible to bring employees back when work becomes available, returning them to furlough if the work stops again.

So, there appears to be nothing preventing you from alternating work between team members as it becomes available, providing each individual furlough period is at least three weeks. We do not recommend a pre-agreed rota for furloughed staff in case this is regarded as reducing hours as opposed to qualifying furlough.

It will be your decision who you keep working or who you bring back to work and when. Consult with your staff and encourage them to discuss it with each other – their differing circumstances may mean that some will be better served by being on furlough and others not.  They may well provide you with an easy solution.

Are businesses that receive income from public sources prevented from claiming under the job retention scheme?

Added 15/04/2020

The short answer is “yes”, the guidance indicates that the public sector, and also private sector businesses securing income from the public sector, are not expected to use the scheme.  However, this is probably too simplistic and may not be the case in all circumstances.  We therefore recommend that advice is obtained before assuming that a claim is available, particularly if a significant proportion of the business income is from continuing public sources.

We are a Medical Company which supplies the NHS and is classed as essential work due to the Covid-19 crisis.  If we have to furlough workers at any time due to the crisis will we be entitled to support from the Government to enable us to continue paying wages or does the ‘no recourse to public funds’ rule come into play?

Added 30/03/2020

The guidance indicates that these businesses should not be furloughing workers but should continue to pay them from income received from public funds.  This indicates that these businesses are outside of the scope of the scheme.  The Government want to ensure essential supplies continue unabated during this period and this is the reason relief is not available. 

However, in the “real world” it is possible that while some parts of the business fall into the category of providing essential services, other parts of the business may not.  It seems unreasonable that the Government would not provide relief to prevent employees in “non-essential services” aspects of the business from being made redundant.  Obviously, action should be taken to reassign employees to crucial services where possible. 

The statement also casts doubt on the usual availability of relief enabling a business to furlough employees who are shielding in line with direct government advice or those that cannot work due to caring responsibilities.  In conclusion, there is doubt about the availability of Government support and we urge the Government to issue further clarification.  Even if further clarification provided, the answer to this question is likely to very much be driven by the specifics of the situation and careful consideration of the position in advance of decisions is essential.

What is the tax treatment of the grant?

Added 15/04/2020

The job retention scheme grant is taxable but given this will be matched by outgoing expenditure (salary, pension contributions and Employers National Insurance) it does not actually increase net profit and result in a tax charge.  Making the grant taxable simply prevents the business from claiming tax relief on the costs that the grant is meeting on behalf of the business.

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The job retention scheme, how to implement and apply

Basics of the scheme

Employers can claim for 80% of furloughed employees’ (employees on a leave of absence) usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.  Details on how to calculate the claim have now been published.

You must have created and started a PAYE payroll scheme on or before 19 March 2020 and have a UK bank account. You must also enrol – if you have not already – for PAYE online.

  • Furloughed employees must have been on company PAYE payroll and appeared on an RTI submission on or before 19 March 2020.  Employees hired after 19 March 2020 cannot be furloughed.  
  • Regular past overtime can be included in claims along with wages, fees and compulsory commission payments. 
  • Discretionary bonuses, tips, commissions and non-cash payments should be excluded.
  • All of salary element of the grant must be paid to employees as gross salary, the employer must not withhold any of this element.

What have the Government said about preventing fraudulent claims under the job retention scheme?

Added 15/04/2020

Several statements have been made over recent days about the risk of fraudulent claims and this has been accompanied by changes to the information required in support of claims under the scheme.  It is evident that HMRC will be actively seeking to detect inappropriate claims.  The initial suggestion was that audits will be carried out later to check claims and this will no doubt remain the case.  However, the significant increase in information to be provided at the time of the claim suggests that a much higher degree of scrutiny will now take place before the funds are released. We expect public naming and shaming to follow detection of fraudulent claims.

Do I need to agree this with my employee(s) or can I simply tell them it is happening?


You are likely to be in breach of their employment contract if you simply impose this on them.  It needs to be agreed – and ideally signed – so you reduce the risks of a claim from the employee later.  Where you have multiple employees and only some are to be furloughed, you need to demonstrate that decisions have been taken on a fair, logical and non-discriminatory basis.

Can I pay some furloughed employees more favourably than others?


You should be consistent to ensure that you are not at risk of behaving in a discriminatory way.  If you plan to top up the earnings of some employees to 100%, then we recommend you do this evenly across your employees.  You are not required to top up to receive the grant.

Can I recoup salary paid since 1 March (for example if I sent my employees home on full pay for a period), or is the scheme only retroactive to compensate employees that have been unpaid since then?

Confirmed & Clarified

If you can demonstrate that workers were laid off or made redundant any time from 1 March 2020 due to coronavirus, you will have an opportunity to obtain the grant to support continued salary payments to them.  If laid off employees received reduced or no pay (other than the Statutory Guaranteed Pay) during March, you can pay them their missed pay at the amount you can reclaim under the grant and contact them to let them know that they can be furloughed instead and this will be backdated to the date they stopped working.

Will the Government pay 80% of the salary for an employee’s reduced hours?


No, under the current information a furloughed worker is not permitted to work at all in the business, you cannot furlough some of the employee’s hours.  (See the next question)

Should I continue to pay 100% of salary even though the Government are only subsidising 80%?


You are not required to pay more than the amount you will receive back from the Government.  You can however choose to‘top up’ that amount.  You need to consider the circumstances as well as the ability of the business to continue to pay the salary.  For example, if you have two employees and only furlough one, the remaining employee may be disgruntled if they are working full time for the same pay as the one not working.  The situation may be different if all employees are being furloughed.

Are the payments to furloughed workers still liable to employers NIC, auto enrolment, apprenticeship levy, etc?


The payments to the furloughed employee are treated as normal pay and will be liable to tax, NIC, etc in the same way as salary and wages.

Is the £2500 cap prorated for part-time employees?


No, the amount is based on the salary, not the number of hours worked.

Can I start by paying full pay to furloughed workers and then reduce this later as funds decline?


The furlough must be agreed between employer and employee and must not be imposed.  This agreement will set out the terms and these must be satisfied.  If you agree a furlough based on full pay then you will need to revisit the agreement to vary the payment entitlement later.  Word your agreement carefully from the outset if you think this is going to be likely.  At the very least the variation would need to be agreed with the employee.

How is payment assessed for those returning from a period of statutory leave?

Added 15/04/2020

Statutory leave includes maternity leave, paternity leave, shared parental leave, adoption leave, sick leave and parental bereavement leave.

In line with other employees, claims for full or part time employees returning from statutory leave after 28 February 2020 should be calculated against their contractual salary before tax, not the pay they received whilst on statutory leave.

Claims for those on variable pay, returning from statutory leave should be calculated using either the:

  • same month’s earning from the previous year
  • average monthly earnings for the 2019-2020 tax year.

How is payment assessed for zero hours workers or those on variable hours contracts?

Confirmed & Clarified

Their pay is to be based on the higher of the pay for the corresponding month last year, or their average earnings over a period.  The period of averaging is the average pay for the 2019-20 tax year, or the period of employment if the employment started later than April 2019.  Please consider which elements of pay are considered and which are excluded when making these calculations.

Is the £2500 cap gross or net?


The £2,500 is the maximum amount that the Government will physically pay for salary.  Therefore, for employees earning below £37500 p.a. the employer will receive 80% of the normal salary.  For those earning above £37500 p.a., the employer will receive £2,500 per month.  Therefore, from the employee’s perspective, this is the gross amount.

The Government have further clarified that they will also contribute the basic employer auto enrolment pension contribution of 3% and the employers National Insurance Contribution of up to 13.8% on the claimable furlough salary in addition to the salary amount.

Can I provide support to contractors during this period?


Contractors are an independent business and care should be taken before favourable support is provided to them.  The main concern is that this could be indicative of employment thus making PAYE or IR35 applicable.  The other issue is that contractors have usually been paid at a higher rate to reflect the independent business to business relationship. The government has announced measures to provide income support to self-employed workers and this may be of assistance to some contractors.

Can I increase salaries now to secure a higher level of support from the Government?


The support will be based on salaries as at the last RTI submission up on or before 19 March 2020 and therefore subsequent changes will be ineffective in securing additional Government support.

Is it possible to furlough more employees if work dries up more than expected?


Yes, this may be a multi-stage process given future workloads are unknown and it may be necessary to add to the number of employees furloughed, or to reintroduce employees to the workforce as demand increases.

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Eligible Employees

Furloughed employees must have been on the company PAYE payroll on 19 March 2020 and included on an RTI submission by then, except for those who have joined under TUPE after this date.  Employees hired after 19 March 2020 cannot be furloughed.  However, employees who were made redundant or who stopped working for the employer on or after 28 February can be rehired and placed on furlough.  Please see other FAQs in connection with reemploying leavers.

I have employees who have joined the Company after 19 March 2020, are they eligible for the furlough scheme?

Added 15/04/2020

Employees hired after 19 March, and those hired before this date but not included on an RTI return by 19 March, are not eligible for furlough, except for a TUPE transfer and payroll mergers.  Employees who have transferred under the Transfer of Undertakings (Protection of Employment) regulations (TUPE) after 19 March will be eligible to be furloughed despite not being on this payroll at the relevant date. There are currently no further details of how this will work or how those with variable income will have their pay calculated in the absence of the necessary past pay data. The guidance will be updated accordingly.

Are foreign nationals with visas eligible for the furlough scheme?

Added 03/04/2020

The scheme will cover all workers paid via PAYE including foreign nationals working for any entity and paying UK PAYE.   There are however potential sponsor compliance issues to consider and while foreign nationals with limited leave are in most cases not entitled to receive public funds, accessing funds through the furlough scheme is not currently prohibited. If you have sponsorship compliance issues to consider, we recommend you seek specialist advice from an immigration advisor.  We can make a referral for you.

Can fixed-term employees be furloughed?


Fixed term workers can be furloughed and their contracts can be renewed or extended during furlough.  However, if their contract ends without immediate renewal you can no longer include them in a claim.

Can apprentices be furloughed?


Apprentices can be furloughed and can continue to train, for which they should receive the appropriate minimum wage.  Further guidance is provided.

Can directors be furloughed?

Updated 17/04/2020

In theory directors can be furloughed in the same way as other employees.  However, a condition of furloughing is that the individual must not undertake work of any kind for the company during this time. The only exception to this is for statutory duties of the director, but this exception does not extend to anything designed to improve the financial performance of the business.  It is harder for a director to demonstrate that they have not undertaken any work, particularly if they are the sole director. 

It may be necessary for a sole director to notify all suppliers, customers and other business contacts that the business has been suspended pending the end of the Coronavirus crisis.  In many cases this is impractical and undesirable because the director may wish to use this time working on improving the business so that when trading recommences the business performs well quickly.  In these circumstances, furloughing is not permitted.  Remember also that this only relates to PAYE income, not dividends and the Government contribution may be very small meaning the director would rather keep working rather than furlough themselves.

Where some directors, but not all, are furloughed, some legal amendments may be required to reflect the position and protect the directors.  These include a directors’ minute to agree the terms of the furlough and rights and responsibilities during this period so everyone is aware of the risks they are potentially liable to.  Care should also be taken to ensure enough directors remain to form a quorum so the company can continue functioning.

Seeking professional advice is strongly recommended before a director is furloughed.

I am a director and am unable to take advantage of the Coronavirus Job Retention Scheme (CJRS) either because I cannot completely stop working, or because I have received dividends rather than salary.  What help is available for me?

Added 03/04/2020

You are in a very difficult situation because you will not qualify for either the CJRS or the self-employment support from the Government.  You therefore need to ensure that the company continues to have the necessary funds available to provide you with an income.  This means that you should consider all the other assistance that the Government has made available to help the cash flow of businesses.  There are several of these but the business interruption loanbusiness rates reduction and delaying tax and VAT payments to HMRC may be the most appropriate.

You may also be able to take personal action to reduce the level of funds you need to draw from the business, for example applying to suspend personal mortgage repayments.

Is a new starter eligible to be furloughed? I have a new employee about to start, but we are now in lockdown.  What are the options for the employer and the employee if they started / are due to start after 28 February and are not on an RTI submission prior to 19th March 2020?

Updated 15/04/2020

This is not a good situation because you are not able to offer them support from the scheme.  Clearly the terms of any signed contracts will be crucial but it may be possible to delay the start date.  Alternatively, it may be possible to negotiate a reduced rate with the employee so while they are technically employed by you, you agree a salary that is affordable to the business while providing some assistance to the employee.

From the individual’s perspective, they have the option of going back to their old employer and asking to be re-employed for the period of the crisis as they can then be eligible under the scheme.  Their old employer may agree and they could still leave and join you at a date to be agreed when the crisis is over.  If their old employer refuses, the only other options appear to be to claiming universal credit or finding alternative employment.

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Apart from salary costs, what do I include in my claim?

Will a company car benefit continue to apply for a furloughed employee?

Added 03/04/2020

The short answer is yes – unless three things happen:

  1. The employer removes the right to use the car altogether for the period of furlough;
  2. The employee does not use the car for the period of the furlough (evidence should be retained such as a tracker report or dated photographs of the milometer at the start and end of the period demonstrating that the car has not moved at all); and
  3. The period of unavailability must be at least 30 consecutive days to secure a reduction in the annual company car taxable benefit.

Can I include the cost of benefits in my claim?

Added 06/04/2020

The reference salary must not include the cost of non-monetary benefits in kind, including those provided through salary sacrifice.  Where benefits are provided, they should be in addition to wages paid under the scheme.

However, HMRC agreed that COVID-19 counts as a life event that could warrant changes to salary sacrifice arrangements.  This means that that contractual changes can be agreed to forego the benefits and increase the reference salary.

Can salary sacrifice payments for cycle to work, etc be deducted from furloughed pay?

Added 03/04/2020

The simple answer is yes, but whether this is worthwhile will depend on whether furlough payments are being “topped up” or not.  If the payments are being topped up by more than the amount of the salary sacrifice then it is possible to reduce the gross payment by the amount of the salary sacrifice.

However, if the payment is not being topped up to a higher amount than the Government contribution then there is no advantage in reducing the salary because this simply reduces the contribution from the Government by the same amount and provides the employer with no additional funds with the employee remaining in an even worse financial position.  The Government have stated that this qualifies as a “life event” enabling, for example, childcare vouchers to be suspended.  It may be preferable to agree a suspension of the employee’s salary sacrifice until after the furlough period.  Whether the remaining balance should then be collected over a shorter period finishing on the original end date, or the period extended to keep the sacrifice at the same level will depend on what you agree with the employee and other factors such as NMW compliance.

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During Furlough

Are furloughed employees allowed to work for others, or do volunteer work while not working for me?

Confirmed & Clarified

The scheme allows furloughed workers to work for other employers during this period. Indeed, the employer can agree to find furloughed employees new work or volunteering opportunities whilst on furlough if this is in line with public health guidance.  The employee must not however undertake work or provide services for their employer or any connected business. 

You can however agree any restrictions in your agreement with the employee.  For example, you will not want them working for competitors, but also you may wish to ensure they do not put themselves at risk.  You will also require them to be able to return to work immediately when you need them.

Will holidays continue to accrue during the period of furlough?

Updated 06/04/2020

As employment contracts continue to apply during a furlough, holiday continues to accrue. 

Can people take their holiday allowance while furloughed?

Updated 14/05/2020

The treatment of holiday has now been clarified in the guidance.  A furloughed employee can take paid leave while on furlough and if they do, this must be paid at full rates, not restricted to 80%.  The employer is still able to claim the furlough amount through the scheme but must pay the additional amount and associated National Insurance and pension contributions.

There are advantages in employees taking leave during this period because it reduces the problem of significant accrued leave to be taken later, but it does come at a financial cost that the employer may not be able to afford.  You may therefore decide the simplest approach is to cancel and reimburse all holiday booked during furlough and not to accept any requests during the furlough period.  This includes the bank holidays in April and May.

Alternatively you could decide that it would be better for employees to use up their holiday allowance rather than storing it up for their return and they may welcome the additional income.

Carry over rules have been relaxed to allow employees to carry over up to 4 weeks’ paid holiday over an extended 2-year period. This is unlikely, however, to apply to those who have been designated as furloughed. The Government guidance outlines that this emergency legislation regarding carry over is designed to help where it has not been ‘reasonably practicable’ for the employee to take holiday e.g. where the workload of that individual was significantly increased due to coronavirus, such as in the case of key workers. It might be the case, however, that employers are not in a position to fund the top-up of furloughed pay to 100%. This could be a consideration for allowing the carry over of holiday for furloughed employees.

Employers must carefully consider whether their employees are able to take the full holiday entitlement, and make decisions in line with guidance when allowing untaken leave to be carried over.

Can I reclaim sick pay as part of the furlough grant?

Updated 19/04/2020

Firstly, a period of short-term illness or the decision to self-isolate should not be used in deciding who should be designated as furloughed.

The guidance has now been updated to clarify the position for those off sick.  This now clarifies that if employers want to furlough employees that are currently off sick or being shielded, they are eligible to do so, subject to the agreement of the employee. In these cases, the employee should no longer receive sick pay and would be classified as a furloughed employee. When an employee is on furlough, you can only reclaim expenditure through the Coronavirus Job Retention Scheme, and not the SSP rebate scheme.

What is the interaction with sick pay if a furloughed worker becomes sick – do they switch to sick pay?

Updated 15/04/2020

This is down to the discretion of the employer who can choose to convert furloughed workers to sick workers if they choose.  This would mean that the job retention scheme relief ceases to be available until the employee is furloughed again, but you may be able to claim the rebate for up to 2 weeks SSP.   

Is enhanced maternity/paternity or shared parental pay eligible to be recovered under the furlough grant?

Added 06/04/2020

Statutory payments such as SMP are not recoverable because these costs are reimbursed via national insurance contributions.  If your business tops up the statutory payments to those on family leave, then the enhanced amount of the payment can be reclaimed.

What are my options / obligations if my employee is at home and it is impractical to work because they must care for young children, vulnerable people, etc?

Updated 06/04/2020

Talk to the employee and be as flexible as possible as regards hours etc if they want to continue working.  You may also discuss furloughing the employee if they agree.

Ending Furlough

Is notice pay eligible for the furlough rebate?

Updated 29/05/2020
We now know that the guidance for employees says that they can be made redundant while on furlough.  Therefore current opinion is that employees can be given notice or paid in lieu while furloughed,  (although the guidance does not explicitly say this).  Equally, reclaiming notice pay under the furlough scheme is not specifically in the guidance from HMRC.  However, it is sensible to conclude:

  1. Employers should be able to reclaim notice pay if an employee is given notice during furlough, for those weeks of notice which fall within the furlough period.
  2. Employers cannot, however, reclaim any extra “top up” to usual pay which may be legally required.
  3. We do not think that you can reclaim payments in lieu of notice under the scheme, because it is a discretionary payment.  So notice pay should be paid as normal during the period of notice, rather than terminating the contract immediately and paying in lieu.
  4. The amount to be paid and whether this is full pay or furlough reduced pay will depend on the amount of notice due for their statutory versus contractual entitlement.
  5. If an employee is serving their notice period when on furlough, the starting point is that their statutory notice pay is protected, meaning they will be due full pay. If the notice period in their employment contract for dismissal is at least a week more than the statutory notice for dismissal, then the pay protection no longer applies and the position reverts to contractual pay, which will be furlough pay.

How do I bring my employees off of furlough?

Updated 29/05/2020

Remember that the principles of employment law still apply, so make sure you act in a fair and reasonable manner.  

  • If you have to make decisions about who to bring back and who to leave on furlough, make them on a fair and objective basis.  Take account of personal circumstances in relation to the outbreak (see more notes below). 
  • If you are bringing employees off furlough, there is no prescribed notice period, but make sure you honour any arrangements that were in your furlough agreement and otherwise provide as much notice as possible.   
  • Confirm in writing the date on which you are bringing back the employee from furlough and the position as regards their terms and conditions of employment – either back to normal or incorporating any agreed changes and the relevant dates if these are temporary. 
  • Furloughed employees will not have been doing any work and so will need to be updated on any changes. 
  • You may wish to consider incentives for those returning to work, to create a differential with those continuing on furlough.  Take care not to breach discrimination laws here, for example by indirectly discriminating against older or disabled workers without legal justification.   

What other things do I need to consider in bringing employees back to work?

The above are generic responses based on the information and understandings available to date.  Given the legislation and official specific guidance is not yet available and the fact that these are generic answers that do not consider your unique position, we can accept no responsibility for any consequences, financial or otherwise, in respect of action taken based on the above.

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Ed Hussey - FCIPD

Director, People Solutions

Ed Hussey is Menzies People Solutions Director providing specialist outsourced HR consultancy to help businesses retain, reward & develop their employees.