UK Job Retention Scheme: updated guidance

HMRC updated the guidance for the Job Retention Scheme over the weekend, bringing helpful clarification on a number of points.  

The scheme itself

Any entity with a UK payroll (through PAYE) can claim, so foreign companies employing people in the UK through PAYE will be eligible.

While almost all employers were confirming furloughs in writing, this is now an express requirement.  You must keep evidence of the written confirmation for five years.

The Portal is not yet live. The aim remains that this will be available by the end of the month.  It is unlikely to be available in time for most employers to know in advance exactly how it will work with their April payroll.

Clarification on workers covered

Employers may furlough “workers” who are not employees (sometimes called “limb (b) workers”) if they are paid through PAYE.  If not paid through PAYE, they may be able to claim independently under the Self-Employment Income Support Scheme.

Agencies can furlough agency workers if they are paid through PAYE (though, as the guidance says, they should first discuss this with the end client).

Fixed-term employees can have their contracts renewed or extended during furlough and the employer will remain eligible for the scheme grant.  As you would expect, the grant stops for a fixed-term employee whose employment ends.

Furloughed workers can do volunteer work and employers can help them find such work without jeopardising their claim under the scheme.  They can also undertake training.

A furloughed employee is entitled to take on a new job, not just continue an existing second job, provided that it is not in breach of their contract.  It appears the first employer can waive any obligation not to take alternative employment, but it would make sense to state expressly that this is only for the period of the furlough.

Employers may also furlough employees who hold Tier 2 visas and it will not constitute a breach of the minimum salary threshold. 

Employers may furlough employees on and off, subject to the three-week minimum furlough period (which applies for each period of furlough).

Wage costs

In a change to the previous guidance, you can now claim for obligatory “regular payments”.  This includes past overtime, fees and commission payments that the employer is obliged to pay.  This would seem to include things like regular shift premiums too.  Employers may not claim for discretionary bonuses and tips. 

Employers can claim for enhanced maternity, adoption, paternity and shared parental pay under the scheme (subject to the normal scheme requirements applicable to ordinary wage costs).

Employers cannot claim the cost of non-monetary benefits, including taxable benefits in kind.  Similarly, employers cannot include benefits provided through salary sacrifice (including pension contributions) in the reference salary.  Redundancy pay is expressly excluded but there is no mention of notice pay.


The guidance still does not mention holidays during furlough.  ACAS has updated its guidance to indicate that the forthcoming bank holidays will not break furlough.  However, it suggests employees should receive normal remuneration.  We hope the draft legislation will bring further clarity on the question of holidays.

If you have any questions, please get in touch with your regular Dentons contact or Virginia Allen.

Subscribe and stay updated
Receive our latest blog posts by email.
Laura Morrison

About Laura Morrison

Laura is a managing practice development lawyer based in Dentons' Edinburgh office, supporting the People, Reward and Mobility practice across the UK. She has more than 14 years' experience as an employment lawyer. Laura's responsibilities focus on supporting our fee earners through a variety of knowledge initiatives, from internal and external training to the development of innovative methods for service delivery.

Full bio