COVID-19: Further guidance issued in relation to the Coronavirus Job Retention Scheme

The government issued a number of additional guidance notes on the CJRS on Friday 17 April in anticipation of the claims portal going live on 20 April

21 April 2020

In advance of the launch of the Coronavirus Job Retention Scheme claims portal on Monday 20 April, HMRC did not disappoint in its enthusiasm for churning out guidance. In addition to confirming that the Scheme will be extended until the end of June, last Friday saw the following additions and updates to the suite of information for employers and employees:


So how do these new and updated documents change what you already know about the Scheme?

Importantly, none of the above documents directly cross-refer to the Treasury Direction issued on 15 April. It is the Direction which sets out the legal framework for the Scheme and where elements of inconsistency remain between the Direction and guidance, which they do, employers would be wise to act in accordance with the Treasury Direction pending any further updates.

In summary, key points in the various pieces of new and updated guidance include:

  1. Guidance on how to calculate 80% of your employees' wages and the Guide for employees to the CJRS both confirm (for the first time) that employees can take holiday whilst on furlough leave but this should be paid at the employee’s normal rate of holiday pay (as required by the Working Time Regulations). The furlough grant can still be claimed whilst the employee is on holiday but you will need to top up as appropriate if you have reduced pay for furloughed employees.
  2. To submit a claim for a furloughed employee, the Treasury Direction states that the employer and employee must have ‘agreed in writing that the employee will cease all work in relation to their employment’. This caused considerable concern for employers as previous iterations of the guidance had not required this and many employers had furloughed employees without necessarily seeking written consent (particularly those who had chosen to top-up pay). The newly updated guidance says that employers must confirm in writing to their employees that they have been furloughed but that ‘if this is done in a way that is consistent with employment law that consent is valid for the purposes under the Scheme’. This means that the Direction remains in conflict with the latest guidance but, given this guidance was issued after the Direction, it may mean that the Direction will be updated. In the meantime, the most prudent course of action would still be to get suitable furlough agreements in place for any employees who have or are to be, furloughed as soon as possible.
  3. The revised guidance makes clear that those on fixed term contracts can be furloughed. Fixed term contracts can be renewed or extended but the renewal or extension must be done before the employee’s contract ends for the employee to continue to be covered by the Scheme.
  4. There is new ‘beefed-up’ text in both the employer and employee guidance which makes it clear that HMRC will check claims made through the Scheme and that payments may be withheld or need to be repaid if the claim is based on dishonest or inaccurate information or found to be fraudulent. Employees are also encouraged to report employers whom they suspect may be abusing the Scheme – for example by asking them to work whilst in furlough.
  5. The guidance confirms that all employers should retain all records and calculations in respect of any claims including in relation to each furloughed employee.
  6. The guidance includes simplified text on the amounts to use when calculating 80% of employees’ wages. Regular payments that employers are ‘obliged’ to make to employees are stated to form part of this calculation which as well as ‘regular wages’ include ‘non-discretionary overtime’, ‘non-discretionary fees’ and ‘non-discretionary commission’ payments as well as piece rate payments. Unfortunately, uncertainty remains as to what ‘regular’ means and exactly what sorts of overtime should or shouldn’t be included.
  7. Both the Guidance for employers on how to make a claim under CJRS and the Guidance on how to calculate 80% of your employees' wages contain many worked examples which employers may find helpful. Importantly, the new guidance sets out that employers must claim for all employees in each period at one time and that an employer cannot make changes to their claim so your information will need to be fully prepared before submitting a claim.

We have been advising many employers on how to furlough employees under the Scheme. If you require advice please do not hesitate to contact me or any other member of our Employment team.

You may also find it useful to refer Coronavirus Job Retention Scheme: an essential guide for employers and The Treasury Direction on the CJRS: a summary of key points which are being updated to refer to this new guidance.


This briefing gives general information only and is not intended to be an exhaustive statement of the law. Although we have taken care over the information, you should not rely on it as legal advice. We do not accept any liability to anyone who does rely on its content.

Key contact

Luke Bowery

Luke Bowery Partner

  • Employment
  • Restructuring and Redundancy
  • Equality, Diversity and Discrimination

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