Update – UK Coronavirus Job Retention Scheme

Check if your employer can use the Coronavirus Job Retention Scheme

Find out if you’re eligible, and how much your employer can claim if they put you on temporary leave (‘furlough’) because of coronavirus (COVID-19).

Contents

• Check if you’re eligible
• How much you’ll get
• While you’re on furlough
• If you do not want to go on furlough
• Guidance for specific customers
• Contacting HMRC

If you and your employer both agree, your employer might be able to keep you on the payroll if they’re unable to operate or have no work for you to do because of coronavirus (COVID-19). This is known as being ‘on furlough’.

Your employer could pay 80% of your regular wages through the Coronavirus Job Retention Scheme, up to a monthly cap of £2,500.

You’ll still be paid by your employer and pay taxes from your income. You cannot undertake work for your employer while on furlough.

Reporting Fraud

The Coronavirus Job Retention Scheme forms part of a collective national effort to protect people’s jobs. You can play a vital role by reporting fraudulent claims to HMRC. Fraudulent claims risk the provision of public services and the protection of livelihoods.

If you’re concerned that your employer is abusing the scheme you should report them. This could include your employer claiming on your behalf and not paying you what you’re entitled to, being asked to work whilst on furlough, or making a backdated claim that includes times when you were working.

Check if you’re eligible

Your employer is responsible for claiming through the Job Retention Scheme on your behalf and for paying you what you are entitled to. You cannot apply for the scheme yourself.

Agreement and Confirmation

• Both you and your employer must agree to put you on furlough – so speak to your employer.
• If your employer and a trade union reach collective agreement that is also acceptable.
• Once agreed your employer must confirm in writing that you have been furloughed to be eligible to claim. Contact your employer if you do not receive confirmation.
• If you are concerned that your employer has not claimed on your behalf, you should speak to your employer. HMRC will not be able to provide information about individual applications.

General Eligibility Criteria

• Any employer with a UK payroll and a UK bank account will be able to claim.
• You must have been employed on 19 March 2020 and on your employer’s PAYE payroll on or before 19 March 2020. This means your employer must have made an RTI submission notifying payment in respect of you to HMRC on or before 19 March 2020.
• You can be on any type of contract, including a zero-hour contract or a temporary contract.
• You can be furloughed under the scheme if you are a foreign national.

Find out what happens if you were employed on 28 February 2020 but not on 19 March 2020.

Exclusions

• This scheme does not apply if you are self-employed or to any income from self-employment. You may qualify for support under the Self-employment income support scheme.

Special Circumstances

• Sick leave or self-isolating: If you’re on sick leave or self-isolating, you should get Statutory Sick Pay (SSP) as a minimum. Your employer can furlough you at any time; if they do, you will no longer receive sick pay, but should be treated as any other furloughed employee.
• Shielding or caring responsibilities: If you are shielding or unable to work due to caring responsibilities (e.g., caring for children due to school closures), you should speak to your employer about whether they plan to place staff on furlough.

The grant will start on the day you were placed on furlough and this can be backdated to 1 March 2020.

If you were made redundant or stopped working for your employer after 28 February 2020

Your employer can agree to re-employ you and place you on furlough. This applies if you were on their payroll on or before 28 February 2020 (RTI submission made on or before that date).

Find out what happens if you stopped working for your employer and were on a fixed term contract.

If you were made redundant or stopped working for your employer after 19 March 2020

Your employer can agree to re-employ you and place you on furlough. This applies if you were employed by them on 19 March 2020 and on their payroll on or before 19 March 2020 (RTI submission made on or before that date).

If you’re on a fixed term contract

• Your employer can re-employ, furlough and claim for you if your contract expired after either:
  • 28 February 2020 and an RTI payment submission for you was notified to HMRC on or before 28 February 2020.
  • 19 March 2020 and an RTI payment submission for you was notified to HMRC on or before 19 March 2020.
• If your fixed term contract has not already expired, your employer can extend or renew it. Your employer can claim for you if an RTI payment submission for you was notified to HMRC on or before 19 March 2020.
• If you started and ended the same contract between 28 February 2020 and 19 March 2020 you will not qualify for this scheme.

If you currently have more than one employer

• You can be put on furlough by one employer and continue to work for another.
• If you’re put on furlough by more than one employer, you’ll receive separate payments from each employer. The 80% of your regular wage up to a £2,500 monthly cap applies to each job.
• If you have had multiple employers over the past year, have only worked for one of them at any one time, and are being furloughed by your current employer, you cannot be furloughed by your previous employer.

If you are on Universal Credit

If you’re earning less because you’re on furlough, your Universal Credit payment might change – find out how earnings affect your payments.

If you are on maternity leave, adoption leave, paternity leave or shared parental leave

• The normal rules for maternity and other forms of parental leave and pay apply.
• Your employer can claim through the scheme for enhanced (earnings related) contractual pay for employees who qualify for parental pay.

If you are pregnant and about to start maternity leave

You should start maternity leave as normal. If your earnings have reduced because you were put on furlough or off sick before your maternity leave started, this may affect your Statutory Maternity Pay. The same rules apply to adoption pay, paternity pay and shared parental pay.

If you’re employed by an individual (e.g., as a nanny)

Your employer can furlough you under the scheme if you are paid through PAYE and were on their payroll on or before 19 March 2020.

If you’re an apprentice

Apprentices can be furloughed in the same way as other employees and continue to train.

You must be paid at least the Apprenticeship Minimum Wage/National Living Wage/National Minimum Wage as appropriate for all of the time you spend training, even if this is more than 80% of your normal wages.

If you’re a public sector employee

• The government expects that the scheme will not be used by many public sector organisations, as most are continuing to provide essential public services.
• Where employers receive public funding for staff costs, and that funding is continuing, they are expected to use that money to continue to pay staff.
• In a small number of cases (e.g., organisations not primarily government-funded and staff cannot be redeployed), the scheme may be appropriate.
• If you work for the public sector, you can get more information from your UK Government Department, employer or respective administration.

Other specific categories

You may be eligible to be furloughed, and receive a grant of 80% of your regular wages up to a monthly cap of £2500, if you are paid via PAYE and are in one of the following categories:

• You are an agency worker
• You are a company director
• You are a contractor with public sector engagements in scope of IR35 off-payroll working rules (IR35)
• You are a salaried member of a Limited Liability Partnership
• You are a Limb (b) worker
• You are an office holder

Detail on how this scheme can apply to you is set out at the end of this guidance (see Guidance for specific customers).

How much you’ll get

Your employer will get a grant to cover 80% of your regular wages, up to a maximum of £2,500.

• Firms will be eligible for the grant from the date you ceased work, from 1 March.
• Your employer will pay you at least 80% of your regular monthly wages, up to a maximum of £2,500, as your wage.
• The claim can be for a minimum of 3 consecutive weeks and for up to 3 months – but this may be extended.
• Your employer can choose to pay you more than the grant – but they do not have to.
• Your employer cannot choose to pay you less than the grant.
• You’ll still pay Income Tax, National Insurance contributions, Student Loan repayments and any other deductions (such as pension contributions) from your wage.

How your monthly wages are calculated

• Salaried (full-time or part-time): Based on your salary. Speak to your employer for details.
• Variable pay (employed for a full year): Employers will claim for the higher of either:
  • the amount you earned in the same month last year
  • an average of your monthly earnings from the last year
• Variable pay (employed for less than a year): Employers will claim for an average of your regular monthly wages since you started work.
• Employed for less than a month: Your employer will pro-rata your earnings from that month.

The grant is based on your regular, contractual pay (e.g., wages, compulsory commission, past overtime). It will not include discretionary commission (including tips) payments or bonuses, non-cash payments or benefits in kind.

If you want to switch out of a salary sacrifice scheme as a result of COVID-19, you should speak to your employer.

Holiday pay

• You will continue to accrue leave as per your employment contract.
• You can agree with your employer to vary holiday pay entitlement, but almost all workers are entitled to 5.6 weeks of statutory paid annual leave which they cannot go below.
• You can take holiday whilst on furlough. Working Time Regulations (WTR) require holiday pay to be paid at your normal rate of pay or, where pay varies, calculated on the basis of the average pay received in the previous 52 working weeks.
• If you take holiday while on furlough, your employer should pay you your usual holiday pay in accordance with the WTR. Employers will be obliged to pay the additional amounts over the grant.
• If you usually work bank holidays, your employer can agree this is included in the grant. If you usually take the bank holiday as leave, your employer would either have to top up your pay to your usual holiday pay, or give you a day of holiday in lieu.

Returning from family related statutory leave

If you are a full or part time employee furloughed on return from family related statutory leave, your employer should calculate the grant against your salary, before tax, not the pay you received whilst on family related statutory leave.

If your pay varies, the employer should calculate the grant using either the:

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

Employees returning to work after being on sick pay

On return to work after time off sick, your employer will calculate how much you’ll receive against your salary, before tax, not the pay you received whilst off sick.

If you are on variable pay, the employer will calculate how much you’ll get using either the:

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

While you’re on furlough

Once you are on furlough you will not be able to work for your employer.

You can undertake training or volunteer subject to public health guidance, as long as you’re not:

• making money for your employer or a company linked or associated to your employer
• providing services to your employer or a company linked or associated to your employer

If you are required to complete training courses, you must be paid at least your appropriate minimum wage (NLW/NMW/AMW) for the time spent training, even if this is more than 80% of their wage that will be subsidised.

Your employer cannot ask you to do work for another linked or associated company.

Other Employment

If your contract allows, you may undertake other employment while your current employer has placed you on furlough, and this will not affect the grant they can claim. You must be able to return to work and undertake any required training.

Redundancy and Rights

• Your employer can still make you redundant while you’re on furlough or afterwards.
• Your **rights as an employee are not affected **by being on furlough, including redundancy rights.

Furlough Duration

• You will need to remain on furlough for a minimum of 3 consecutive weeks.
• Your employer can place you on furlough more than once, and one period can follow straight after an existing furlough period, while the scheme is open. The scheme will be open for at least 4 months.

If you do not want to go on furlough

If your employer asks you to go on furlough and you refuse you may be at risk of redundancy or termination of employment, depending on the circumstances of your employer. However, this must be in line with normal redundancy rules and protections.

Guidance for specific customers

If you’re an agency worker (including if you are employed by an umbrella company)

• Where agency workers are paid through PAYE, they are eligible.
• Furlough should be agreed between the agency, as the deemed employer, and the worker.
• Agency workers should perform no work for, through, or on behalf of the agency that has furloughed them.
• If you are employed by an umbrella company, it will be for the umbrella company and the worker to agree whether to furlough the worker or not.

If you’re an office holder

If you are an office holder who is remunerated by PAYE then you can be furloughed. The furlough, and any ongoing payment, will need to be agreed between you and the party who operates PAYE. Where you are a company director or member of an LLP, the furlough arrangements should be adopted formally as a decision of the company or LLP.

If you’re a company director

• Salaried company directors are eligible to be furloughed.
• Where furloughed directors need to carry out duties to fulfil statutory obligations, they may do so, provided they do no more than would be judged reasonably necessary (e.g., they should not do work to generate commercial revenue or provide services).
• This also applies to salaried individuals who are directors of their own Personal Service Company (PSC).

If you’re a contractor with public sector engagements in scope of IR35 off-payroll working rules (IR35)

• Contractors who are deemed employees according to the off-payroll working rules can be eligible for this scheme in a small number of cases.
• The public sector organisation, the contractor’s Personal Service Company (PSC) and the fee-payer must formally agree that the contractor is to do no work during their period of furlough.
• The fee-payer would be able to apply for the furlough payment (80% of monthly contract value, max £2,500) and employer NICs.
• If the contractor is continuing to receive payments from a public sector client (including through the CJRS), income from this client should be excluded from any calculation of the reference pay if the contractor also decides to furlough themselves as an employee or director of their own company.

If you’re a salaried member of a Limited Liability Partnership (LLP)

• Members of LLPs who are designated as employees for tax purposes (‘salaried members’) are eligible to be furloughed.
• To furlough a member, the terms of the LLP agreement may need to be varied by a formal decision of the LLP, for example to reflect the fact that the member will perform no work.
• The reference salary for this scheme is the LLP member’s profit allocation, excluding any amounts which are determined by the LLP member’s performance, or the overall performance of the LLP.

If you’re a Limb (b) Worker

• Where Limb (b) Workers are paid through PAYE, they can be furloughed.
• Those who pay tax on their trading profits through Income Tax Self-Assessment, may instead be eligible for the Self-Employed Income Support Scheme.

If you’re a contingent worker in the public sector

The Cabinet Office has issued guidance on how payments to suppliers of contingent workers impacted by COVID-19 should be dealt with where the party receiving the contingent worker’s services is a Central Government Department, an Executive Agency of a Central Government Department or a Non-Departmental Public Body. This guidance can be read here.

Contacting HMRC

If you have questions about the scheme, you should contact your employer first.

We are receiving very high numbers of calls. Contacting HMRC unnecessarily puts our essential public services at risk during these challenging times.

But you can contact HMRC if you cannot get the help you need online or from your employer.

Updates to this Guidance

• Published 26 March 2020
• Last updated 23 April 2020
• 23 April 2020: New information has been added on collective agreement reached with a trade union. Also clarified eligibility criteria for employees on fixed-term contracts.
• 17 April 2020: New information added on how to report fraud or abuse of the scheme, fixed term contracts, holiday pay, returning from family related statutory leave, sick pay and agency workers.
• 15 April 2020: Updated information on payroll date and eligibility
• 9 April 2020: New information about eligibility has been added.
• 4 April 2020: This guidance has been updated with more information about the Coronavirus Job Retention Scheme.
• 26 March 2020: First published.