Employer guidance on Coronavirus Job Retention Scheme – further update

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Employer guidance on Coronavirus Job Retention Scheme – further update

Published 14 April 2020

HMRC published the third version of its guidance on the Coronavirus Job Retention Scheme (CJRS) on Thursday night. In our previous alert we highlighted three areas where significant questions remained – sickness absence, TUPE and holidays. The updated guidance addresses our questions on sickness absence and TUPE but does not touch on holidays. We may well get further guidance on this area in the coming days.

In evidence given to the Treasury Select Committee last week, HMRC said that the scheme is due to open on 20 April – in time for HMRC to be able to make payments by 30 April. The aim is to get money into employers’ accounts within 4-6 working days of submission of the claim.

Sick leave

The updated (third version) HMRC guidance now answers some of the questions regarding the interaction of the CJRS with sick leave and statutory sick pay (SSP). The guidance confirms that if an employer wishes to furlough an individual who is currently on sick leave, they may do so. In that situation, the employee would no longer receive SSP and would instead receive furlough pay under the CJRS. This can include employees who are on long-term sick leave or are being shielded, but understandably an employer cannot claim under the SSP rebate scheme and the CJRS at the same time for the same employee.

If an employee becomes sick while furloughed, they must be paid at least SSP. It is up to the employer to decide whether to move the employee onto SSP or to keep them on furlough at their furloughed rate which can then be claimed through the CJRS. If the employee is moved onto SSP, the employer can no longer claim for the furloughed salary through the CJRS. Employers are required to pay SSP themselves, although may qualify for a rebate for up to 2 weeks of SSP.

Given the relatively modest sums paid by way of SSP, careful thought needs to be give as to whether to move someone off furlough and onto SSP.

Workers who are shielding

The updated guidance clarifies that shielding workers do not have to be at risk of redundancy in order to be eligible for furlough – this requirement was in the previous version of the guidance, and was at odds with the situation for those with caring responsibilities. It was evidently an error in the previous version and the amendment is welcomed.


At the time of our last alert we were aware of anecdotal evidence that TUPE transferred staff where the transfer happened after 28 February 2020 could be furloughed. HMRC have now confirmed this.

The guidance states that “ a new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 28th February 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership”.

Work visas

The updated guidance confirms that employers can furlough employees on all categories of visa. Employees will not be regarded as breaching their visa conditions if they receive funds under the furlough scheme: "Grants under the scheme are not counted as ‘access to public funds’”.

Working for associated or ‘linked’ organisations

The guidance clarifies that furloughed workers cannot work for organisations that are associated or “linked” to their employer as well as not working for their employer. This had been mentioned in the previous guidance for employees but not addressed in the employer guidance.

Consolidated payroll schemes

Where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 28 February 2020, the new scheme will be eligible to furlough those employees and claim the grants available under the CJRS.

Returning from family friendly leave

To lessen any disadvantage in relation to calculation of furlough pay the updated guidance states that claims for employees returning from statutory leave (e.g maternity) after 28 February 2020 should be calculated against their salary, before tax, not the pay they received whilst on statutory leave.

However the guidance for claims for those on variable pay who are returning from statutory leave says that their pay should be calculated using either the same month’s earning from the previous year or average monthly earnings for the 2019-2020 tax year. It is currently unclear in the guidance as to whether this should include the statutory pay they received or not – we hope that this will be clarified in due course.

How employers must use the grant

The CJRS states that the entire grant received by the employer must be paid to the employee in the form of money and cannot be used to pay for the provision of benefits or a salary sacrifice scheme. There can also not be any deductions from the amount for fees or an administration charge.

Where the employer provides benefits to furloughed employees, these benefits should be in addition to the wages that must be paid under the terms of the CJRS.

With regard to salary sacrifice arrangements, the responsibility to make employer and deemed employee contributions (as applicable) continue to lie with the employer. In particular on pension arrangements the Pensions Regulator has also published new COVID-19 employer guidance which addresses some key pension points. Employers may therefore wish to consider their approach to such arrangements and legal advice should be taken before any decisions are made.

National Insurance and pension contributions

The guidance has clarified that the reclaimable NI and pension elements are on the furlough salary rather than pre-furlough salary. The employer may claim employer pension contributions on furlough pay up to the level of the minimum automatic enrolment employer contribution (i.e. 3% of qualifying earnings). Grants for pension contributions can be claimed up to this cap provided the employer pays the whole amount claimed to a pension scheme for the employee as an employer contribution.

Contractors with public sector engagements in scope of IR35 off-payroll working rules (IR35)

The updated guidance also provides further information for IR35 contractors of public sector organisations who may be claiming under the CJRS. In these circumstances the contractor may also be eligible.

How to claim the CJRS

HMRC have released some further information so that employers can prepare their claim in readiness for the scheme opening on 20 April.

To claim through the CJRS, employers will need:

  • 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
  • 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 the minimum length of furloughing of 3 consecutive weeks)
  • bank account number and sort code
  • contact name
  • phone number.


Louise Bloomfield

Louise Bloomfield


+44 (0) 113 251 4717

Joanne Bell

Joanne Bell


+44 (0) 161 934 3179

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