HMRC has issued more detailed guidance on the Coronavirus Job Retention Scheme.  It provides further clarity around a number of relevant points.

Here are some aspects of the guidance that will be important to all businesses but especially to those with temporary workers:


Only those workers who were on payroll on or before 28th February 2020 can be furloughed. What does this mean?

For example, what does it mean for temporary workers who were not actually working on the 28th but who were on an agency’s payroll waiting to be paid?

The position is still not 100% clear but in our opinion, a sensible approach would be to treat any temporary worker who “worked” in the pay reference period immediately before the 28th  and who was or would have been paid for that work as being “on payroll”. This follows other similar legislation for changes in National Minimum Wage and the introduction or IR35 changes so there appears to be precedent for such an approach.


If contractually allowed, your employees are permitted to work for another employer whilst you have placed them on furlough.

For any employer that takes on a new employee, the new employer should ensure they complete the starter checklist form correctly. If the employee is furloughed from another employment, they should complete Statement C.

This is particularly important for agencies that in practice often have no idea what other work agency workers do.


Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them while they are furloughed, including for the agency’s clients.


Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree whether to furlough the worker or not.

It is our opinion that umbrella company workers should be paid 80% of their gross pay, rather than 80% of NMW.  There is a difference of opinion within the industry however, we believe that this is the fair and right thing to do. Legislation is unclear however the Chancellor was very clear in his support for all business and there has been clear guidance given to the Public Sector supply chain on how to proceed.


You can claim for furloughed employees who are shielding in line with public health guidance (or need to stay home with someone who is shielding) if they are unable to work from home and you would otherwise have to make them redundant.


Employees who are unable to work because they have caring responsibilities resulting from coronavirus (COVID-19) can be furloughed. For example, employees that need to look after children can be furloughed.


 Full or part time employees on a salary
  • Claim for the 80% of the employee’s salary, as of 28 February 2020, before tax.
Employees whose pay varies
  • If the employee has been employed for 12 months or more, you can claim the highest of either the:
    1. same month’s earning from the previous year
    2. average monthly earnings for the 2019-2020 tax year
  • If the employee has been employed for less than 12 months, claim for 80% of their average monthly earnings since they started work.
  • If the employee only started in February 2020, work out a pro-rata for their earnings so far, and claim for 80%.
 Employer National Insurance and Pension Contributions
  • You’ll still need to pay employer National Insurance and pension contributions on behalf of your furloughed employees, and you can claim for these too.

You cannot claim for:

  • additional National Insurance or pension contributions you make because you chose to top up your employee’s salary
  • any pension contributions you make that are above the mandatory employer contribution
 Apprenticeship Levy

Employers still need to pay the levy in respect of furloughed workers. This is an issue especially for businesses such as high-volume, low margin staffing companies: they are expected to fund the levy from their own pockets while workers are on furlough. We believe that this will put some off using this scheme.

 Calculation of amounts to be claimed

“employers” will be responsible for calculating the amounts they are claiming. This will, in some cases, require a recalculation of amounts actually paid via payroll in order to adjust for discretionary pay elements.

 HMRC reserves right to adjust your claim

The guidance makes it clear that “HMRC retain the right to retrospectively adjust all aspects of the claim.” All employers therefore need to think carefully about the amounts they are claiming and that they can justify those amounts at a later date if necessary. Record keeping of decision making regarding furloughing workers and claiming grants will be important.


There is still no clear guidance on whether businesses’ will be able to pay dividends while making use of the JRS which is intended for companies which cannot otherwise pay their workers.  This is a key consideration to owners and directors who pay themselves via a combination of salary and dividends.

You can view the detailed guidance at

If you would like to discuss any of these points further please let us know – we are more than happy to add clarity where we can.