HMRC Updated Guidance – Furlough

HMRC issued updated guidance, clearing up any confusion around the Coronavirus Job Retention Scheme, where employees who may otherwise be laid off are instead placed “on furlough”, with the government paying 80% of their wages (up to a £2500 per month cap).

The latest guidance:

  • CLARIFIED: Employees are permitted to work for another employer whilst you have placed them on furlough. This is subject to their employment contract permitting this.
  • CLARIFIED: an employer can reclaim 80% of compulsory commission back from HMRC, as well as basic salary. But it can only be referring to the commission from past sales as the furloughed employees cannot be completing new sales when on furlough.
  • CHANGED: employers can reclaim 80% of fees (awaiting clarity of what constitutes fees) from HMRC. The previous guidance said they could not.
  • CLARIFIED: the 80% does not include non-monetary benefits (eg the value of health insurance or a car).
  • CLARIFIED: Company directors can be furloughed. They can still perform their statutory duties, but not other work for the company.
  • CONFIRMED: Employees can be furloughed multiple times, ie they can be furloughed, brought back to work, then re-furloughed (subject to each furlough period being at least three weeks)
  • NEW: Employers must notify employees of their furlough status in writing (the previous guidance did not require it be in writing) and keep the record of that written notification for five years.

Lots of areas remain unclear. For example:-

  • what do ‘statutory duties’ actually cover for company directors?
  • are employees who TUPE into a business after 28 February covered?
  • can employees take annual leave when on furlough, and what should they be paid

The latest guidance, published April 4th is available on the government website here: https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme