Coronavirus Job Retention Scheme

The Government announced its ground breaking Coronavirus Job Retention Scheme on Friday 20 March 2020. Shortly afterwards the first version of the HMRC Guidance for Employers was published and began to explain how the Coronavirus Job Retention Scheme would work, that initial guidance has now been updated eight times with the latest version published on 1 May 2020. HMRC Guidance For Employers – History details each of the updates. HM Treasury issued directions to HMRC, on 15 April 2020, pursuant to the Coronavirus Act 2020 which unfortunately contradicted the HMRC guidance in some areas, the Treasury Direction was updated and reissued on 20 May 2020. A further iteration of the Treasury Direction will be issued during June to describe the changes to the scheme that will take affect from 1 July 2020. HMRC Guidance is just that, guidance whereas the Treasury Direction is a legally binding document. ACAS have also issued guidance for employers.

The Aim of the Coranavirus Job Retention Scheme


Updated guidance is released regularly and I will update this page as more details are announced.

This page was firstly published on 22 March 2020 and the last update was 8 July 2020.

The original guidance indicated that the scheme was an alternative for anyone that would have otherwise been laid off or made redundant due to the impact of coronavirus on the employer’s business. The latest guidance states that the Coronavirus Job Retention Scheme is designed to help employers whose business operations have been severely affected by Coronavirus and that employers which cannot maintain their current workforce because of this can make use of the scheme.

The aim of the Job Retention Scheme is to reduce the amount of redundancies and avoid employees being laid off without pay during the Coronavirus crisis. When no work is available for an employee the Coronavirus Job Retention Scheme will provide security of continuity of employment supported by a minimum level of pay.

It does not help with any situations where employees had agreed to reduce their hours, or to a pay cut but where they are still required to work. There is currently no option to do a mixture of reduced hours and furlough leave.

Summary of the Coranavirus Job Retention Scheme

The scheme is intended to avoid redundancies and protect jobs.

  • All employers, large or small, in the UK who employ workers through the PAYE scheme and have a UK bank account are eligible to participate in the scheme.
  • Once an employer engages in the scheme the Government will pay a chash grant of 80% of wage costs, up to a cap of £2,500 per month plus the Employers National Insurance contributions and minimum automatic enrolment pension contributions based on paying the lower of 80% or regular wages or £2,500 per month.
  • For workers with variable pay the 80% is applied to the higher of:
    • the earnings in the same pay period in the previous year; or
    • the average earning in the whole of the previous 12 months (or fewer if they have worked for less time than this, including a part month calculation if that were taken on in February 2020).
  • Individuals will pay Income Tax and National Insurance on any payments received through the scheme.
  • Employers can, if they wish, top up the wages with the additional 20% or pay the extra for those earning over £2,500 per month.
  • Workers must be told about and have agreed to been “furloughed”. Workers must also be told about and agree to do no work for the business whilst furloughed. I can advise you on how you do this and properly document it.
  • There is no requirement for a business to be closed to access the scheme. Which means employers should be able to furlough some workers and not others.
  • Workers remain employed during the furlough period. Which means length of service and statutory benefits such as holiday entitlement will continue to accrue in the normal way.
  • The scheme is administered by HMRC, it was initially open for a period of 3 months but was quickly extened to a fourth month and has now been extended to 31 October 2020 (see 12 May update below).
  • The scheme is backdated to 1 March 2020 with a view to covering those who have already been made redundant due to the Coronavirus outbreak. Employees made redundant on or after 1 March 2020 must be re-engaged by the employer and placed on furloughed leave if the Employer is to qualify for the grant.
  • Workers who are furloughed to avoid redundancy could be made redundant immediately after the scheme ends. There is no requirement to bring the employee back to work after the period of furloughed leave. An employee who is made redundant during the period of furloughed leave would become eligible to a redundancy payment and then grant payments would cease.
  • Workers who receive a lower income as a result of these changes may be eligible for support through the welfare system, including universal credit.
  • The HMRC portal went live on 20 April 2020 and aims to pay out claims within 10 days of submission. Employers must self certify that they have workers who have been furloughed, together with details of their earnings.
  • HMRC retain the rights to retrospectively audit employers, with scope to claw back fraudulent or erroneous claims.
  • HMRC have set up a portal for individuals to report suspected fraudulent claims (see 23 April update below).

Update 30 MAY 2020
Chancellor Rishi Sunak has announced reforms to the Coronavirus Job Retention Scheme and introduced the Flexible Furlough Scheme. These are the headline points announced at his press conference:

  • 10 June: last day that employers can place employees on furlough.
  • 30 June: the scheme closes to new entrants. (The three-week furlough period must therefore start on or before 10 June). I read this as an employee who has not been placed on furlough previously, if you are rotating staff on and off furlough that should continue to be ok as they are not new entrants. The HMRC Guidance and Treasury Direction should clarify this point.
  • 1 July: flexible furlough is being introduced, meaning employees will be able to work part-time and be furloughed part-time.  Businesses will decide how that will work (in terms of the time split). When claiming the Coronavirus Job Retention Scheme grant for furloughed hours; you will need to report and claim for a minimum period of a week, for grants to be calculated accurately across working patterns.
  • 1 August: employers will have to pay employee’s national insurance contributions and pension contributions, and can no longer reclaim them through the CJRS.
  • 1 September: the government will reimburse 70% of salary (up to a maximum of £2,190). Employers will pay ER NICs and pension contributions and 10% of wages, to make up the 80% up to the cap of £2,190 (or more, depending on what the employer agreed with the employee).
  • 1 October: the government will reimburse 60% of salary (up to a maximum of £1,875), and employers will continue topping up to 80% (or more, depending on what was agreed with the employee) plus ER NICs and pension contributions.
  • 31 October: the furlough scheme will close.

Top Tip
If you don’t think you will be able to pay the employer contributions from 1 August or the top-up pay of 10% from 1 September or 20% from 1 October, because your business is dormant or you’re in one of the sectors that might not bee 100% back up and running by then. Please get in touch now so we can discuss your options and devise a plan that is right for your business. Remember redundancy exercises must incorporate a period of consultation, so if you were intending to serve notice on 31 August 2020 you would have needed to have started the process by mid August. If you wanted the notice period to end on 31 August you would need to start the process much earlier.


Update 20 MAY 2020
The amended Treasury Direction dated 20 May 2020 states that “a claim for payment under Coronavirus Job Retention Scheme must be made in accordance with this update Direction if the claim is made after the day on which this direction is first published (Wednesday 20 May 2020)”.

It has been clear for some time that the paper-trail must reveal that “agreement” was reached that no work would be performed for the employer. The new Treasury Direction expands on the conditions that must be met to demonstrate that an employee has been instructed by you to cease all work in relation to their employment.

The new guidance also states that the written agreement must be retained until at least 30 June 2025, previous versions of the guidance simply stated that evidence should be retained for at least five years.

More information about the requirements of the 20 May 2020 version of the Treasury Direction can be found on my furloughed page.

Update 12 MAY 2020
Rishi Sunak has announced that the Coronavirus Job Retention Scheme has been extended from 30 June to 31 October 2020.

There will be no change to the operation of the scheme before 30 July. From 1 August part time furlough will be allowed, allowing businesses to bring employees back into work for part of the week and furlough them for the remainder of the week. Full guidance on the new rules will be issued by the end of May and I will update this page as soon as I have received and read the guidance.

Update 23 APRIL 2020
The latest guidance explains that employees and members of the public will be able to report suspected fraud through an online portal and warns employers that payments may be withheld in full or need to be repaid if the claim is based on dishonest or inaccurate information or found to be fraudulent. The guidance also adds that dishonest or deliberately fraudulent claims put essential public services and the protection of livelihoods at risk during these challenging times.

By 14 May 2020 the HMRC online portal for reporting fraud relating to the furlough scheme had received 795 complaints.

Who Can Make A Claim Through The Coranavirus Job Retention Scheme?

Any UK organisation with employees can apply, including businesses, charities, recruitment agencies (agency workers paid through PAYE) and public authorities. You must have created and started a PAYE payroll scheme on or before 28 February 2020 and have a UK bank account.

Where a company is under the management of an administrator, the administrator will be able to access the Job Retention Scheme.

Employers can now claim for furloughed employees who were employed and on their PAYE payroll on our before 19 March 2020.

Update 1 May 2020
Directors who pay themselves once a year (typically one-person businesses where most revenue is taken as dividends) are, subject to certain conditions, eligible to make a claim through the Coranavirus Job Retention Scheme.

What Will HMRC Reimburse?

You will receive a grant from HMRC to cover 80% of a furloughed employee’s regular gross pay up to a cap of £2,500 per month plus the employer’s National Insurance contributions and minimum auto-enrolment employer pension contributions on the subsidised pay.

The Treasury now suggests that salary which is ‘conditional on any matter’ is excluded and this may possibly catch some arrangements where the employer has said it will only pay if their claim for the grant is accepted by HMRC. The Treasury also says that a claim can be made for earnings a worker ‘reasonably expects to be paid’ which might include earnings which were deferred, although further guidance is needed.

Update 30 May 2020
From August 2020, the level of government grant provided through the Job Retention Scheme will be slowly tapered to reflect that people will be returning to work. That means that for June and July the government will continue to pay 80% of people’s salaries. In the following months, businesses will be asked to contribute a modest share, but crucially individuals will continue to receive that 80% of salary covering the time they are unable to work.

Employees With Regular Pay

For employees whose pay does not vary, this is their ‘regular’ pay before tax including fees, compulsory commission payments and past overtime (although the expression ‘non-compulsory overtime’ has slipped into the latest guidance) in their last pay period before 19 March 2020 but excluding discretionary bonuses (including tips), commission and non-cash payments. If you have already calculated payments based on previous guidance up to 28 February 2020 then this figure should be used.

Employees With Variable Pay

For employees whose pay varies from one week to another, e.g. those on shifts or irregular hours, you can claim for the higher of:

  1. the earnings in the same pay period in the previous year; or
  2. their average earnings over the 2019/20 tax year.

If they have been employed for less than one year an average for the months since starting work, including a part-month calculation if they were taken on during February 2020) whichever is the higher.

Once this monthly pay has been calculated, this is used as the basis for the employer national insurance and automatic enrolment pension contributions elements of the claim.

The £2,5000 Cap

There is currently no official guidance on how the cap will be calculated.

If 80% of salary is £2,500 per month the full salary would be £3,125 per month. This amounts to an annual salary of £37,500. However, as employment costs, such as employer’s National Insurance and pension contributions, will be included in the amount you can claim the annual salary will be lower than this.

Tips and Tronc Payments

HMRC guidance published on 23 April 2020 now confirms that Tronc payments (a specific method of distributing tips) should be excluded from the calculation of wages.

National Minimum Wage Rates

Individuals are only entitled to the National Living Wage (NLW), National Minimum Wage (NMW) or Apprentices Minimum Wage (AMW) for the hours they are working or treated as working under minimum wage rules.

This means that furloughed workers who are not working can be paid the lower of 80% of their pay or £2,500 even if, based on their usual working hours, this would be below their appropriate minimum wage. However, time spent training is treated as working time for the purposes of the minimum wage calculations and must be paid at the appropriate minimum wage, taking into account the increase in minimum wage rates from 1 April 2020.

Employees Tax and National Insurance

The amount paid to the employee will be subject to the usual deductions for tax and national insurance. They will also have to pay automatic enrolment pension contributions on qualifying earnings unless they have opted out or stopped saving into a workplace pension scheme.

Associated Employers Costs

In addition to the 80% employers can also claim for the associated employer national insurance contributions and minimum automatic enrolment employer pension contributions.

Where an employer chooses to top up salary, any associated employer national insurance contributions or automatic enrolment pension contributions will not be recoverable through the Scheme.

Student Loans

Student loans should be paid as normal and are not covered under the Scheme.

Government Guidance

Government guidance issued on 17 April includes a PDF to download: Coronavirus Job Retention Scheme Step-by-step Guide For Employers which includes worked examples and a webpage: Work out 80 per cent of your employees wages also includes a calculator which can currently be used to work out what you can claim for most employees who are paid the same amounts each pay period (for example, weekly or monthly). The calculator will be improved to cover employees who are on variable pay.

HMRC are calculating the grant based on calendar days and not working days and therefore although the employee only works Monday to Friday the three week claim for 1 – 21 April 2020 will be 21 calendar days not 15 working days.

The guidance clearly states that it’s the employers responsibility to check that the amount claimed is correct.

How Does The HMRC Online Portal Work?

HMRC have established an online portal through which employers will be able to claim the grant, this went live on 20 April 2020.

New documents to which employers will now want to refer (and will be expected by HMRC to do so) are a Coronavirus Job Retention Scheme Step By Step Guide For Employers and Guide to Claiming Wages under the Scheme (reflecting claim information previously contained in the Employer Guidance). HMRC is expecting up to 450,000 claims per hour in the first few days, so this Guide has an important role in trying to reduce the number of enquiries.

To make a claim you will initially need to work out for each claim period:

  • the total amount being paid to each furloughed employee;
  • the total employer NICs; and
  • the total employer pension contributions.

You will also need to provide the following information:

  • PAYE reference number (your scheme must have been created and started by 19 March 2020
  • The number of employees being furloughed
  • The date the period of furlough started for each employee
  • The date any periods of furlough ended, if applicable
  • National Insurance numbers for the employees you have furloughed
  • Names of the employees you have furloughed
  • Payroll/works number for the employees you have furloughed (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 the minimum length of furloughing of 3 consecutive weeks)
  • Company registered name and address
  • Your bank account number and sort code
  • Your contact name
  • Your phone number

Employers will be able to submit a claim every 3 weeks and claims can be back-dated to 1 March 2020. Presumably this will means the claim is made on a PAYE scheme basis, rather than on an individual basis as each employee is furloughed.

Employers will make the claim at the point at which the payroll is run or in advance of an imminent payroll.

Where there are fewer than 100 furloughed employees details for each employee will need to be entered into the system – this will include their name, National Insurance number, claim period and claim amount and payroll/employee number (optional).

Where there are more than 100 furloughed employees a file will need to be uploaded with the information detailed in the last paragraph rather than input directly into the system. HMRC will accept the following file types: .xls, .xlsx, .csv, .ods.

Claims should be made from the date the employee was sent home and NOT the date the decision was made or the date they were written to.

Making A Claim – Changes From 1 July 2020

The key document for employers making a claim under the CJRS in respect of periods on and after 1 July 2020 is the new Steps to take before calculating your claim guidance. This confirms that, from 1 July, claims can only cover days within one calendar month, but this does not prevent the furlough itself from overlapping months – there is no need for an employee’s furlough to be ended and restarted with each month-end. If your claim period differs to your pay period this will introduce aditional complexity.

In particular, the updated guidance provides that:

  • Claims for any furlough periods starting before 1 July must end on or before 30 June (and be submitted by 31 July 2020). Separate claims will need to be submitted to cover the days in June and the days in July, even if employees are furloughed continuously.
  • Claim periods starting on or after 1 July must start and end within the same calendar month and must last at least 7 days unless claiming for the first few days or the last few days in a month. Employers can only claim for a period of fewer than 7 days if the period they are claiming for includes either the first or last day of the calendar month, and they have already claimed for the period ending immediately before it.
  • Employers can only make one claim for any period so must include all furloughed or flexibly furloughed employees in one claim, even if they are paid at different times. Where employees have been furloughed or flexibly furloughed continuously (or both), the claim periods must follow on from each other with no gaps in between the dates. Employers using flexible furlough should ideally claim only once they are sure of the exact number of hours being worked during the claim period. If claims are made in advance and turn out to be too high, the overclaim must be paid back.
  • Where an employee is flexibly furloughed, the employer will need to calculate “usual hours”. This is because the 80% grant available and the monthly cap are reduced to reflect the proportion of “usual hours” that will be furloughed (so if the employee is to work 50% of usual hours, the grant will be half of 80% of usual wages subject to a monthly cap of £1,250). An employee’s “usual hours” will need to be determined as follows:
  • For those who are contracted to work a fixed number of hours and whose pay does not vary according to hours worked, the “usual hours” are the contractual hours as at the end of the last pay period ending on or before 19 March 2020.
  • For those on variable hours and pay, the “usual hours” are the higher of either the average number of hours worked in the tax year 2019 to 2020, or the corresponding calendar period in the tax year 2019 to 2020, including any hours of leave for which the employee was paid their full contracted rate (such as annual leave) and any hours worked as ‘overtime’ where pay for those hours was not discretionary.
  • For piece workers, the same applies as for variable hours workers, but if the hours worked are unknown, the hours should be estimated based on the number of ‘pieces’ produced and the average rate of work per hour.
  • The Calculate how much you can claim guidance sets out how to do the rather complicated calculations required, including for flexible furlough and once the employer contributions increase in stages from August to October. A new example of calculating a claim for a flexibly furloughed employee has been published and the previous examples of calculations have been updated. A cold flannel is advised.

The Claim for wages guidance notes that the information required for a claim will include the number of “usual hours” the employee would work in the claim period, the number of hours they will or have worked, and the number of furloughed hours in the claim period. Records of this information and also the calculations required to calculate the usual hours should be kept. The guidance also includes some new text explaining how errors made in claiming will be addressed. If a further claim is being made, that will be adjusted to reflect a previous overpayment; a process is being worked on to recover overclaimed amounts if no new claims are planned. If there has been an underclaim, the employer should contact HMRC to amend the claim, as it will need to conduct additional checks.

Pension Contributions and Flexible Furlough

Care will also need to be taken when calculating employer and employee pension contributions where a furloughed employee returns to work flexibly and when calculating the amount that can be reclaimed in respect of employer pension contributions from 1 July. You can find out more about this in our recent blog which looks at the issues that will need to be considered.

Coronavirus Job Retention Scheme Step By Step Guide For Employers

Split into five sections, the Step By Step Guide aims to clarify what information employers need and what they have to do to make a claim under the Scheme. There are several aspects to highlight:

  • the application needs to be done in one session. (There is currently no save and return option)
  • sessions will time out after 30 minutes of inactivity
  • once a claim is submitted, employers should print or make note of their allocated claim reference number – email confirmation will not be sent
  • individuals bear responsibility for the accuracy of claim information
  • claimants should retain calculations which form the basis of a claim
  • payment will be made six days following claim submission
  • payments may be withheld or need to be returned to HMRC if a claim is based on dishonest or inaccurate information or found to be fraudulent.

Is It A Grant Or A Loan?

The main difference between a grant and a loan is repayment. A loan requires you to repay the money you borrow, whereas a grant does not. Grants are, essentially, a gift. In other words, they’re non-repayable.

Therefore as the Job Retention Scheme will be a grant not a loan, so it will not need to be repaid unless HMRC has overpaid or paid out in cases where it should not have done so because not all the conditions have been met. Payments received by a business under the scheme must, however, be included as income in its calculation of taxable profits for income tax and corporation tax purposes, although employment costs will continue to be deducted as normal.

What Might Happen If HMRC Overpay Or Pay Out Incorrectly?
HMRC is not generally in the habit of administering such an extensive money distribution scheme and many of the functions it will be performing will be new.

One would expect HMRC’s powers to be modelled along its current collection powers. As such, HMRC will likely to be able to go back 4 years to recoup payments that were not due. Where an incorrect payment was made as a result of careless behaviour one would expect HMRC to recoup payment for a period of 6 years. Finally, where HMRC have made an incorrect payment as a result of deliberate behaviour it is likely that it will have 20 years to recoup it.

One would also expect late payment interest to be payable on any incorrectly made grant and penalties to be applied.

In light of the above, we would strongly advise clients to collect and keep the evidence needed to justify that they qualify for the scheme and that any grants applied for have been properly calculated. It is likely that HMRC will obtain powers (or will have modified existing powers) to seek information from employers and third parties.

HMRC will have detailed records to hand through the PAYE system, and employers should be careful to carry out calculations and to be able to justify them. HMRC’s guidance does suggest that there will be a level of review of eligibility before payments are made.

When Will The Grant Be Paid?

It was announced on Thursday 9 April that the HMRC portal would be open for employers to submit their first claims on 20 April 2020 and that the first payments would be made by 30 April 2020.

The payment will be made via BACS to the employer, which explains the requirement to have a UK bank account.

Update 23 May 2020
The latest iteration of the Treasury Direction allows an employer to make a claim before they pay the employee the full amount to which they are entitled under the CJRS, provided that the employer intends to pay them within a reasonable period of receiving the CJRS grant. Employers who are experiencing significant cash flow difficulties may find this additional flexibility helpful.

Other Financial Support
If you cannot afford to pay wages due to furloughed staff whilst waiting for the grant visit the Government page: Covid 19 support for businesses for more details of support available to businesses during this time.

The Government is providing small business grant funding to support small businesses that already pay little or no business rates because of small business rate releive (SBRR), rural rate relief and tapered relief. This will provide a one-off grant of £10,000 to eligible businesses to help meet their ongoing business costs.

How Should The Grant Be Treated For Tax Purposes?

Payments received under the scheme are made to offset deductible revenue costs. It must therefore be included as income in your calculation of taxable profits for income tax and corporation tax purposes, in accordance with normal principles. You can deduct employment costs as normal when calculating taxable profits for income tax and corporation tax purposes.

What To Do If You have Overclaimed

If you’ve overclaimed some or all of your grant through the Coronavirus Job Retention Scheme, you can either:

You will need your 14 or 15 digit payment reference number that begins with X. If you don’t have a record of that you will need to contact HMRC.

What Happens After The Job Retention Scheme Ends?

The Government said the Job Retention Scheme will initially be open for a period of 3 months, but on 17 April the HM Treasury announced that the scheme had been extended to 30 June 2020, a further extension to 31 October 2020 was announced on 15 May 2020, although there will be changes to how the scheme operates from 1 August 2020.

When it does come to an end, it will be up to employers to decide whether employees can return to their duties. If they can’t, there is no obligation to retain the services of furloughed employees after the scheme ends but notice periods and statutory redundancy rights will continue to apply in the usual way.

Many large employers were pressing the government for confirmation on whether the scheme will be extended beyond 31 May 2020.

If a company needs to make 20 to 99 employees redundant, the employer must allow for a minimum 30-day consultation period. For 100 redundancies or more, this jumps to 45 days prior to the termination date.

Decisions to extended the scheme further will clearly be dependent on when and at what rate the current restrictions placed on us all can start to be lifted. In addition, it would be wrong to assume that as soon as the restrictions are lifted, employers will no longer need support under the scheme. I would anticipate some form of phased withdrawal being announced.

If you are considering implementing redundancies please get in touch with me as there will be a requirement to show why you are not operating this scheme and retaining employees.

£1k ‘bonus’ For Every Employee Brought Back From Furlough
On 8 July 2020 the Chancellor of the Exchequer, Rishi Sunak, announced during his summer statement that employers will receive a £1,000 “job retention bonus” for every worker they bring back from furlough and continue to employee until January 2021.

For every employee who:

  • has been furloughed at some point during the lifespan of the scheme,
  • remains employed by you between November 2020 and January 2021, and has
  • must have earned at least the Lower Earnings Limit for national insurance (£520 per month) between November and January.

you will receive a bonus of £1,000 bonus from the Government.

Coronavirus Job Retention Scheme and Anomalies

Sick Leave

Employees who are ‘shielding’ in line with public health guidance can be placed on ‘furlough leave’. Employees who are currently on sick leave or are self-isolating in line with government advice are entitled to Statutory Sick Pay (SSP) but once the period of self isolation ends they can then be ‘furloughed’.

My article Coronavirus and Absence Due To Sickness provides more information about shielding, self isolation and what to do if an employee displays Coronavirus symptoms whilst at work.

Second Jobs

Each job is treated separately, so the individual could be furloughed from one or both, although the guidance on 9 April makes clear that a furloughed employee cannot also be furloughed from a previous employer for whom they no longer work. Where they are furloughed from both, the cap applies to each employer separately. The guidance issued on 4 April also makes it clear that a furloughed worker can work elsewhere while furloughed from a different job, provided this is contractually allowed.

Maternity, Paternity, Adoption and Shared Parental Pay

Individuals who are taking or plan to take maternity leave must take at least two weeks off work (or four weeks if they work in a factory) immediately following the birth of their baby, for health and safety reasons.

Statutory payments take precidence over the Job Retention Scheme so an employee who is in receipt of statutory maternity pay (SMP), or maternity allowance (MA), will continue as normal i.e. until the 39 weeks has expired. Where contractual payments are made in addition, this is a wage cost which can be recovered through the Scheme – if the employee has been furloughed. The same principle applies to other contractual family-related pay. Those returning from maternity, paternity, shared parental, adoption, sick, or parental bereavement leave who are then furloughed have their grant based on their gross salary and not on the pay they received while on leave.

Take extreme care here though, as transferring an employee to furlough leave would end the period of maternity (etc) leave. That could mean the employee ends up returning to work earlier than they intended.

Update 1 May 2020
HMRC have announced a new Statutory Instrument that came into effect on 25 April 2020, which deals with the calculation of an employee’s “average weekly earnings” for the purposes of statutory parental pay entitlement for those employees who have been furloughed during the relevant period. My article Coronavirus and Statutory Parental Pay provides more information about how an employee’s average weekly earnings should be calculated if they have been furloughed during the relevant period for calculating statutory pay.

Topping Up Pay to 100%

Employers must pay the employee the lower of

  1. 80 per cent of their regular wage; or
  2. £2,500 per month.

An employer can choose to top this up, but there is no obligation to do so. This is the case even if the amount paid falls below the national living/minimum wage, because these minimums only apply where a worker is working. However, if workers are required to complete online training while furloughed, they must be paid at least the national living/minimum wage for the time spent training, even if this is more than the wage that is subsidised.

Keeping Records

The latest HMRC guidance contains an explicit requirement that employers should retain “all records and calculations” in respect of the employer’s claims for wages costs. This is to include records of the amount claimed for each furloughed employee and the period in respect of which the individual is furloughed and a claim has been made under the Scheme. In other words, and perhaps not surprisingly, the employers are going to have to show their workings if they are claiming money under the Scheme.

What’s Next?

The government’s guidance is constantly being updated and I will review the content of these pages as more information becomes available.

If you have any questions please call me on 0114 360 0626 or simply email me at

Up-to-date information for individuals and employers on the spread of the coronavirus can be obtained from


An hour of my time can save MANY hours of your time!
I can review your Contract of Employment and Employee Handbook for compliance with this new legislation that takes affect on 6 April 2020 and provide a written report detailing where your contract and employee handbook will need updating. You will receive your report within 5 working days of sending me your contract and employee handbook.

If you authorise me to make the changes I have suggested in my report there will be an additional fee. My written report will confirm the fees and anticipated timescales.

Tap into and share the Kea world!

Don’t forget to add Kea to your social networks and when you read an article that you like share it with your network!

Coronavirus Job Retention Scheme