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When the government first launched the furlough scheme eligible employees had to be on the employer’s PAYE payroll on 28 February 2020. This payroll date has now been extended to 19 March 2020. As a result we have tried to answer some questions that you may have relating to this, together with other points that have been raised with us over the last few days.

What does the change of payroll date in the JRS from 28th to 19th March mean?

The position is that employers can furlough the following employees:

  • Employees where the employer notified HMRC that they were on the payroll before 28 February 2020.
  • Employees who were on the payroll on or before 28 February 2020 but were made redundant, laid off, furloughed or stopped working for the employer before 19 March 2020.
  • Employees placed on payroll after 28 February but before 19 March 2020 can also now be placed on furlough although HMRC must have been notified of their addition to the PAYE payroll on or before 19 March 2020.

In all cases the employees must not be doing any work for the employer during furlough and the employer must have a UK payroll and UK bank account and have enrolled for PAYE online.

Employees added to the PAYE payroll after 19 March 2020 cannot be furloughed by the new employer unless there has been a qualifying transfer.


New employers can claim under the scheme for employees of a previous business who transferred to them after 19 March 2020 if TUPE applies, or the PAYE business succession rules are applicable. Finally, if a group of companies with multiple PAYE schemes transfer the employees into a new consolidated PAYE scheme after 19 March 2020, those employees can still be furloughed as well.

Which pay period do employers use for salaried employees in their calculations?

Employers should normally base their claim for the 80% of a salaried employee’s wages on the employee’s last pay period prior to 19 March 2020.

However, the payroll date under the Coronavirus Job Retention Scheme has changed from 28 February to 19 March. This has made the way in which employers calculate the 80% of the wages more complicated.

For employers who have already used the previous guidance to make their calculations these employers can make the 80% calculations based on either:

  • the employee’s salary as at 28 February 2020, or
  • the employee’s salary in the last pay period before 19 March 2020.

If there has been another pay period between 28 February and 19 March employers can therefore opt to use either calculation, as they wish. Although these two figures may be the same, in some cases the calculations may be different if another pay period has fallen between before 19 March.

Employers should include any regular payments they are obliged to pay employees in the figure used as the basis of their calculations. This will include wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and discretionary commission payments and non-cash payments should not be included.

As there is a delay to payments do employers have to pay first and claim later?

 Yes, employers must pay the employees first and wait for the claim to come through.

Employers will need to fund 80% of furloughed employee’ wages up to £2,500 a month and then calculate and retrospectively claim that amount back. Employers can use normal payroll systems, deducting tax and national insurance under the PAYE system.

Although the scheme is hoped to be fully operational by the end of April it is a new system. It is probably advisable to work on the basis that there may be some glitches with the April payments.

What have the Government said about preventing fraudulent claims under the job retention scheme?

Several statements have been made over recent days about the risk of fraudulent claims and this has been accompanied by changes to the information required in support of claims under the scheme.  It is evident that HMRC will be actively seeking to detect inappropriate claims.  The initial suggestion was that audits will be carried out later to check claims and this will no doubt remain the case.  However, the significant increase in information to be provided at the time of the claim suggests that a much higher degree of scrutiny will now take place before the funds are released.

How is payment assessed for those returning from a period of statutory leave?

Statutory leave includes maternity leave, paternity leave, shared parental leave, adoption leave, sick leave and parental bereavement leave.

In line with other employees, claims for full or part time employees returning from statutory leave after 19 March 2020 should be calculated against their salary, before tax, not the pay they received whilst on statutory leave.

Claims for those on variable pay, returning from statutory leave should be calculated using either the:

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

Is a new starter eligible to be furloughed?  What are the options for the employer and the employee if they started / are due to start after 19 March 2020? 

This is not a good situation because you are not able to offer them support from the scheme.  Clearly the terms of any signed contracts will be crucial, but it may be possible to delay the start date.  Alternatively, it may be possible to negotiate a reduced rate with the employee so while they are technically employed by you, you agree a salary that is affordable to the business and provides some assistance to the employee. From the individual’s perspective, they have the option of going back to their old employer and asking to be re-employed for the period of the crisis as they can then be eligible under the scheme.  Their old employer may agree, and they could still leave and join you at a date to be agreed when the crisis is over.

For any further advice please contact Clover HR on 0121 516 0299 or email us at info@cloverhr.co.uk

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