This is a temporary scheme designed to help employers retain their employees and protect the UK economy

The Coronavirus Job Retention Scheme has been updated. Please see below:

The online portal you’ll use to claim opened on 20 April. Businesses, and agents that are authorised to act on behalf of clients for PAYE matters, will be able to claim. However, file only agents, including Payroll Bureaus, will not be able access the service due to data protection reasons. 

Businesses will need the following information on each of their furloughed employees:

  • National Insurance number
  • Salary
  • National Insurance and pension contribution information

pdf icon  Furlough letter template


Job Retention Scheme FAQs

The Government has announced that all UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. ICB has sought clarification from Ministers on the detail of the scheme and will update these FAQs as further information is obtained.

Please read these FAQs in conjunction with the official guidance for employers and employees.  The following material is provided only as a guide and is not legal advice.  

You can access support through ICB's HR and technical support line on 0203 405 4000

The official guidance states businesses will need to: designate affected employees as ‘furloughed workers,’ and notify your employees of this change - changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal.

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month and has set up a new system for this purpose.  The scheme will cover the cost of wages backdated to March 1st and will remain open until the end of October although the rules will begin to change from 1st July.

From the 1st July ‘flexible furlough’ is being introduced meaning, furloughed workers will be able to return to work part-time and from 1st August employers are being asked to pay employee’s national insurance and pension contributions.  From 1st September employers will also have to contribute 10% percent towards the salaries of their furloughed staff. The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month. From October the grant will drop further to 60% of their salary, up to £1,875, with the employer contributing 20%.



How do employers evidence to HMRC that an individual is a furloughed worker?

A schedule of furloughed workers will need to be produced and submitted to HMRC through a new portal created for the purpose. The following information will need to be included:

  • Business ePAYE number
  • The number of employees being furloughed
  • The claim period you are claiming for (minimum period is 3 weeks)
  • Full name of employee
  • Employee NI number

The Corporation Tax Unique Taxpayer reference or Company registration number (or Self Assessment Unique Taxpayer reference) is also required if applicable.

What figures will I need to provide?

You will  also need to enter the total amount being claimed for all furloughed workers, and amount of Employer's NICs and minimum employer pension costs. You do not need to enter individual income but the system will check the number of workers being claimed for against relevant RTI submissions. if any of the information is not provided, or does not match what is already in the system, then the claim will be rejected.


How often can I make a claim?

Claims can be made in accordance with pay periods. You will need to enter the first and last dates of the relevant pay period. For monthly paid employees this could be done at the time the payroll is run with the dates matching the pay period. For weekly paid employees you can claim each week if you so wish. However. if you have a mixture of monthly and weekly paid employees, you will  need to match the claim dates so that  you include (say) your monthly pay and any weekly pay that occurs within those dates. If you submit a claim half way through a week, then that week should be placed into the next claim period. However claims can be made up to 14 days before the next RTI submission.

What happens if my workers are on a rolling furlough?

You will need to be very careful with such claims as you will not be able to claim for a worker going back onto furlough until they have completed three weeks. Carefully check the dates that you are claiming for to ensure that you are not either missing any  one out or trying to claim twice for the same period.

In what time frame will firms be reimbursed for furloughed workers?

Most businesses will already have submitted their first claim and many claimed from 1 March up to and including 30 April. The first grants have already been made and take 6 working days from submission of the claim, provided there are no queries.

You must retain all of your claim records for 5 years as HMRC retain the right to audit.  Any claims based on inacurrate information can be recovered by HMRC.

Furloughed employees should not contact HMRC as it is the employer who will make the payment to the employee


Is there a duration attached the furloughed status?

  • The scheme was originally to continue for 3 months but on 12 May it was extended to the end of October. The government announced further changes to teh scheme on 29  may amending some of the terms with effect from 1 July and confirming that the scheme will end on 31 October.
  • You will be able to recall employees before the end of October should your business require them provided they have been furloughed for the minimum periodand from 1 July 'flexible furlough' is being introduced meaning employees will be able to work part time in the business and furloughed part time. An employee can work as much of as little as the business needs with the employer paying their wages in full whilst working.
  • Until end June, the minimum term for an employee to be furloughed is 3 weeks; however this has been removed as of 1 July.  From 1 July, furloughed workers will be able to return to work part-time with employers paying for the time that an employee is working, with the government paying up to 80% or £2,500 for the furlough element. There is no minimum period applied now but any claim through the CJRS must be a minimum of one week period meaning an employer can put in a maximum of four claims a month
  • From August, employers will have to pay their employee’s national insurance contributions and pension contributions meaning these cannot be reclaimed via the CJRS.
  • From September the government will only fund 70% of salary up to a maximum of £2,187.50 with employers required to top up to 80% minimum (or £2,500).
  • From October, the government will only fund 60% of salary up to a maximum of £1,875 with employers required to top up to 80% minimum (or £2,500).
  • The scheme is backdated to 1 March 2020 but only for employees who for whom the employer submitted an RTI on or before 19 March. 


What is the definition of "salary" on which 80% pay should be calculated on?

This has now been confirmed to be on base salary and any regular payments you are obliged to pay for such as past overtime, fees and compulsory commission payments. Discretionary bonuses (including tips), commission payments and non-cash payments should be excluded.

The maximum is 80% of gross pay up to a maximum of £2,500 per month per employee (£1,175.50 from September, £1,875 from October). If the employee earns less than this, then it is based on their gross pay. The Government is also paying the Employer's NICs and the minimum pension contribution over and above the wage until the end of July. 

We understand that you can change the basis of the calculation month to month in order to pay the employee the maximum allowable. Note: if you are using payroll software to calculate the amount that can be reclaimed, it might show a slight difference to that given in the HMRC calculator. HMRC's advice is to use the software figures. Small differences will not be significant.

The government have issued further guidance on how to make the calculation click here. There is also an HM Revenue & Customs example of how to calculate a claim for a flexible furlough employee click here

Flexible and zero hours working

The rules on how much to pay someone who does not earn a regular salary or wage, or who is on a zero hours contract, is based on the average number of hours worked, or the average income.

For an individual who has been employed for 12 months or longer, is (from HMRC guidance) to be the higher of

  • the amount earned in the same month last year
  • an average monthly earnings from the last year

If the individual has been employed for less than a year then the average is calculated over the actual number of months or weeks worked in the period since the start of your employment.

Suppose a worker was taken on in October 2019 and earned the following amount:

October 19    £1000

December 19    £1500

January 20    £605

Then the average monthly earnings would be £3105 / 3 = £1035.

If the individual is furloughed then they could be paid 80% of £1035 = £828 per month. This applies to each month of the furlough period even if it is unlikely they would have been given work to do during some of that period.

ICB strongly advises that working calculations are kept to show justification for when the amounts are verified at a later date.


Can employees who are certified as sick be made furloughed workers?

Employees on sick leave should be paid SSP, or sick pay where contractual, for the duration. They can subsequently be furloughed when their period of sickness ends if required as the scheme is not intended for short term sickness, but not after the end of June if they haven’t previously been furloughed.  However employers are entitled to furlough employees who are being shielded or are on long term sick leave.  Please be aware that an employer will not be able to recover SSP if you have furloughed an employee.

It should be noted that furloughed employees retain their statutory rights and therefore if a furloughed employee becomes ill they must be paid at least the SSP rate if they are considered as sick and not furloughed.

Is it available for employees already receiving statutory or contracted sick pay?

As above


Can employees who are off on any other leave e.g. maternity leave or paternity leave etc be made furloughed workers?

Prior to the end of June the answer was no; they should remain on their statutory leave.

For employees on maternity leave the normal rules apply. If you offer enhanced (earnings related) contractual pay to women on Maternity Leave, this is included as wage costs that you can claim through the scheme. The same principles apply where your employee qualifies for contractual adoption, paternity or shared parental pay. 

From July only employees returning from Maternity, Shared Parental, Adoption, Parternity or Parental Bereavement leave can be furloughed unless they have been furloughed in a previous period.

Will other periods of authorised absence be suspended during this time e.g. maternity leave?

Furlough is a temporary layoff and in this case the government have undertaken to pay up to 80% of salary as a mechanism to prevent mass unemployment where an employee may be expected to resume work again in the future. It will not replace other schemes such as Maternity leave which will remain in place. Most of the SMP can already be recovered by employers.


Can we furlough workers on a rolling basis?

You can furlough additional workers during the period the scheme is in operation in line with business requirements with 10 June beign the last day you can furlough an employee if you have not already. subject to the minimum claim periods (three weeks). Note: there are different rules for those returning from paid statutory leave.

From 1 July ‘flexible furlough’ is being introduced meaning you can bring back employee’s back on a part time basis.  Further details will be published by the government on 12th June 2020.

Can employees work for other employers whilst furloughed e.g. supermarkets, NHS?

Prior to July furloughed employees cannot work for you during this period, training is permitted providing the employee does not provide services to or generate revenue for the employer whilst undertaking it.  They still remain your employees.

 From July you will be able to bring back employee’s on a part time basis with the government continuing to fund the furlough element (reducing September, October and ceasing at the end of October).

However, if an employee has more than one employer (multiple jobs), provided it is permitted within your employment contract, they can continue to work for one employer and be furloughed by another. If that employer subsequently decides to furlough, the same rules apply and they can receive 80% of their salary from that employer.

The 80% of salary or £2,500 cap applies to each job.

Additionally, if your contract of employment allows, an employee can begin work for a new employer whilst furloughed. 

Can employees intermittently be furloughed, punctuated by periods of paid holiday or working?

Each claim covers specific employees therefore you may be able to bring them back into work for the following period to undertake paid work and from 1 July you can bring them back on a part time basis if required.  It should be noted that employees will continue to accrue annual leave whilst furloughed so you wouldn’t change an employee’s status from furlough due to holiday.

Can furloughed workers be rotated back into the business?

As it is a separate claim for each period furloughed workers can be brought back into work on a gradual basis as required by the business recovery within the time parameters of the scheme (currently end October 2020). Unless the government elect to extend the scheme, other action may need to be considered beyond the initial term.

Can furloughed workers undertake ad hoc work for the business?

Prior to July, furloughed workers are not allowed, to undertake any work for the business although from 1 July you can bring back employees on a part time basis with the government continuing to fund the furlough element. 

The rules are slightly different for Officers and Directors who can undertake statutory obligations of the business under the Companies Act 2006. 


Will employees continue to accrue annual leave while furloughed?

Holiday leave will continue to be accrued during the furloughed period.

How will holiday entitlement and pay be treated during the furlough period?

Whilst an employee is furloughed, no other payments should be made. The employee is in effect temporarily ‘laid off’ as opposed to permanently laid off.

Employees can request and take holiday days and bank holidays in the usual way during a period of furlough leave.  They must however seek agreement from their employer first.  Furlough workers must get their usual pay in full for the holiday, bank holidays taken. 

Do we need to pay-up all accrued but unused holiday to the point of furlough?

No. This is not necessary as holiday leave will continue to accrue whilst they are furloughed

Should I ask employees to take annual leave before furloughing?

This is a matter for each business to consider. The purpose of furloughing is to prevent unemployment and to ease financial pressures on a business in order that it can survive a temporary downturn in business. Asking an employee to take leave will result in the company continuing to pay the employee which in the current climate may not be an attractive proposition.

Are we expected to deduct used but not accrued holidays to this point?

No. The worker will remain an employee during the period of furlough and retain contractual benefits other than that around pay.


Will PAYE continue to be deducted in the normal way?

HMRC will pay a grant to the employer who will process the furloughed employees through their payroll as normal so PAYE and Employee National insurance contributions will be deducted. Employees will also continue to make automatic enrolment contributions on qualifying earnings unless they have elected to opt out or have ceased savings into a workplace pension plan.


Can Trade Unions negotiate on behalf of all employees in a collective agreement situation?

Yes, this is possible where such an agreement is in place.


Can we deduct pension, and other voluntary deductions from furloughed workers pay? Do pension contributions continue or are they suspended?

Employees will continue to make automatic enrolment contributions on qualifying earnings unless they have elected to opt out or have ceased savings into a workplace pension plan. Pension contributions will continue as outlined above.


Does the scheme apply equally to all workers? Is it applicable to temporary staff and if so, what is the eligibility?

The scheme is open to all UK employers that had created and started a PAYE  payroll scheme as at 28 February 2020. Therefore, it does not cover:

  • Workers on the PAYE payroll on or before 19 March 2020 if they have not been notified to HMRC on an RTI submission on, or prior to 19 March 2020
  • Workers not on the payroll as at 20 March 2020 (previously 28 February 2020).
  • Workers  not previously furloughed prior to 10 June.
  • Self-employed individuals whether working as a sole trader or through a partnership or LLP (who should apply for the SEISS)
  • Workers who are working on personal contracts but do not satisfy the conditions to be an employee (those with no holiday or sick pay entitlement)

Any UK organisation with employees can apply, including:

  • businesses charities
  • recruitment agencies (agency workers paid through PAYE)
  • public authorities

Provided they were on the payroll before 28 February you can claim for any type of employee including:

  • Full time
  • Part time
  • Employees on agency contracts
  • Employees on fixed term contracts
  • Employees on flexible or zero hours contracts

How should an employer agree furloughed status with an employee i.e. in writing?

Your affected employees will need to be designated ‘furloughed workers’ and this will need to be confirmed in writing. It is important to note that changing employees’ employment rights is still subject to employment law and unless lay off or short time working clauses are included in contracts of employment, separate negotiation may be required. It is best to take employment advice on this point.

Is a furlough agreement template letter available?

Yes, you can download it from the top of this page.

Will I need to top up the other 20%?

You can fund the difference if you wish but there is no obligation to do this under the scheme. From 1 September you will also need to contribute 10% as the government will only re-imburse 70% (up to a maximum of £2,187.50) and from October the grant reduces again to 60% (up to a maximum of £1,875) meaning a 20% contribution from the employer is required.

Are there any conditions for the employer attached to applying furloughed status e.g. should we guarantee continued employment for a period?

The employee cannot work for you if furloughed prior to July. The scheme will continue until the end of October 2020. Until the end of July 2020, the minimum tern an employee cab=n be furloughed is 3 weeks. The government has indicated that there is no requirement on the employer that employment needs to be guaranteed afterwards. At this point it may be necessary to consider termination of employment. It is important that you seek further advice on this prior to taking any action as employment law still applies and if carried out incorrectly you may find yourself subject to an Employment Tribunal claim.

What options do we have to give our employees alongside the option to become a furloughed worker e.g. statutory redundancy?

The idea behind the Coronavirus Job Retention Scheme (CJRS) is for businesses to retain employees during the period in order that they can bring them back when the business situation improves (subject to the current scheme duration).

Can workers be required to take furlough leave?

Furlough is an alternative to permanent lay off/redundancy. Provided your contracts of employment include the appropriate clauses to enable you to change their status you can impose this. Can employers continue to contact furloughed employees?

The employee cannot work for you during this period (even making phone calls or sending email); however, we would imagine that it would okay to periodically keep in touch from an employee welfare aspect.

Can I re-hire staff who I have recently made redundant or who left?

The scheme is to be backdated to 1 March 2020 so therefore you could theoretically withdraw the redundancy notice if it took place within this period. You may need to seek employment advice as to how to achieve this through the ICB technical support line. Anyone made redundant prior to this date is not eligible for this scheme.

Can we use the scheme for staff whose start date has been deferred or where offers have been withdrawn?

No. You can only furlough employees who were on the payroll as at 28 February 2020.

How will pay be calculated in the case of employees with varying remuneration e.g. those working on commission?

You can claim for any regular payments you are obliged to pay; however, discretionary bonus (including tips), commission and non-cash payments are excluded. For employees whose earnings fluctuate for other reasons you can claim the following:

If an employee has been engaged for a full 12 months you can claim the higher of the same month’s earnings from the previous year, or, the average earnings for the 2019/20 tax year

If an employee has been employed for less than a year you can claim an average of their monthly earnings since they started their employment If an employee only started in February 2020 a pro rata amount can be claimed

Can furloughed workers receive training?

A furloughed employee can take part in training as long as it does not provide services or revenue to the business. If workers are required to complete training in connection with the business, they must be paid at least the National Living Wage or National Minimum Wage for the time spent training. (Otherwise, the furlough wage is not subject to the NLW or NMW.)

Will redundancies be considered unfair in circumstances where employers could have applied for the scheme?

Companies should explore all options and adopt the best option for their company. The job retention scheme is to avoid mass redundancies and unemployment; however, in some cases there may be no alternative.

Will any ‘special circumstances’ defence be compromised by the scheme where the employer feels financially compelled to ignore the obligation to consult on collective redundancies prior to any dismissals or seeks to shorten the mandatory collective consultation period?

Companies must ensure they always follow due process; failure to do so may result in unfair dismissal claims. Employment Tribunals may be sympathetic to the current situation but will not look favourably where companies have deliberately failed to follow a fair and reasonable process.

Will the scheme be extended beyond 3 months?

On the 12 May the government announced that the scheme would be extended by a futher 4 months from the initial period to the end of October 2020.  The same rules apply until the end of June; however the rules will change from July.  The government have confirmed that the scheme will close at the end of October 2020.

What does the scheme offer to charities?

The scheme is available to employees remunerated through the PAYE. Charity workers remunerated this way will qualify

Can employers  furlough Tier 2 migrants under the scheme?  If so, what are the notification requirements for employers? Are furloughed employees still required to meet minimum salary thresholds?

The Home Office has confirmed that migrants can be furloughed. See official guidance here:

Can Directors furlough themselves?

Yes, directors are eligible to be furloughed provided they are on the payroll.

What is different is that company directors have duties to their company as set out in the Companies Act 2006 therefore the decision should be made by the board and formally adopted within the company records. Directors will still be able to carry out their particular duties to satisfy the statutory obligations of the company without falling foul of the furlough rules; however they cannot carry out work that would generate revenue or provide services to benefit the company.

The concern for directors is that they will often take a lower or even no salary from the business. Instead they will often utilise dividends to top up their income, as and when they have the profits to do so. As dividends are not subject to PAYE, the dividend amounts will not form part of the calculation for the director. Directors in this position are likely to find that should they qualify for a CJRS grant, the amount paid would likely be 80% of a low salary. A further concern is that a director must be non-active to be furloughed other than to meet statutory obligations so consideration must be given to that otherwise they may fail the CJRS requirements.

The CJRS is also available to salaried individuals who are directors of their own personal service company (PSC).

Can staff refuse to be furloughed?

Yes, staff must agree to be furloughed and cannot be forced. If an employee refuses; the company should consider alternative options for example, redundancy.

I understand that the employment contract has to allow variation in terms at company discretion otherwise a consultation period of a month is needed. If this is done, I assume the company can still back date the application of the furlong?

Typically, where there is no contractual clause to vary the contract or lay off employees; employers must enter a period of consultation and seek employee agreement prior to applying the changes to the contract. However, this is an exceptional situation and many companies do not have time to conduct a consultation period. The government have offered the CJRS and therefore companies should discuss the options with their staff openly and frankly and seek agreements from staff. The aim is to avoid a redundancy situation.

Does the company have to prepare a continuity plan to apply for furlough?

No continuity plan is required to apply for a CJRS grant, however when selecting employees, employers should be aware that equality and discrimination laws will apply in the usual way.

Can holiday leave be carried over?

Working Time Regulations will be amended. Workers who have not taken all of their statutory annual leave entitlement due to COVID-19 will now be able to carry up to 4 weeks over into the next 2 leave years.

For students that are PAYE tax exempt but paying NICs - are they still eligible?

Furloughed employees must have been on your  PAYE payroll on 28 February 2020. If the employees are earning below the tax threshold (£12,500 a year) they would still be eligible to claim. Further information should be available when HMRC publish the full guidelines.

If making staff redundant after furlough has ended, do normal redundancy rules apply (e.g. one week for each year of continual service above minimum close of contract notice to a maximum of 12 weeks)?

Yes, the usual redundancy procedure will apply and payments should be made according to the redundancy policy if the organisation has one or statutory redundancy guidelines.

How quickly can HMRC process payments?

No definitive date has been provided regarding time scales of when payments will be made however the HMRC portal will be open on 20 April.

How much of this process will be automated in terms of BACS payments to our business account?

Once HMRC have received your claim and you are eligible for the grant, payments will be made via BACS payment to a UK bank account. Claims will need to be made in accordance with actual payroll amounts at the point at which you ran your payroll or in advance of an imminent payroll.

How should pension deductions be calculated for employees on Furlough?

You can claim for the minimum required automatic enrolment employer pension contributions on the subsidised wage.

Can furloughed employees continue to have salary sacrifice deductions taken from their pay?

Agreement will need to be sought before suspending salary sacrifice arrangements as these arrangements have been contractually agreed and would, in general, have to be terminated and dealt with subject to that agreement. We would advise completing a cost – benefit analysis before carrying out this measure as dependant on policies employers and employees may be required to pay more tax and National insurance contributions

Can voluntary deductions e.g. private medical insurance continue to be deducted from employees on furlough?

Yes, providing the scheme is still in operation and the employee has no objection to continuing with their scheme.

For employees with variable pay, where Feb 2019, or average of last 12 months is used as reference, is taxable pay the reference pay referred to?

Yes, the average pay over the last 12 months will need to be calculated as gross and then the 80% of this amount will be used as part of the Furlough pay calculations.

Will employers use the FPS via RTI to notify HMRC that a worker is furloughed, will an effective date be required?

Yes, this will be used. You will be required to make the claim via the online portal once it is set up and the information from your RTI will be used. An effective date will be required when making your claim via the portal.

What other evidence will HMRC require to prove that a worker has been furloughed?

To claim, you will need: your ePAYE reference number the number of employees being furloughed the claim period (start and end date) amount claimed (per the minimum length of furloughing of 3 weeks) your bank account number and sort code your contact name your phone number You will need to calculate the amount you are claiming. HMRC will retain the right to retrospectively audit all aspects of your claim.

Can an employee pay frequency change during furloughed status?

This is subject to agreement from the employee to change their payment frequency.

How should employees who were due a pay rise during the furloughed period e.g. NMW increases, be treated - should the new rate of pay apply?

The government have stipulated that pay will be based on the earnings prior to 28 February 2020.   The government guidance states individuals are only entitled to the national living wage, NMW or apprentices minimum wage for the hours they are working or are treated as working under minimum wage rules.  This means a furlough worker who is not working can be paid at the lower of 80% of their wages or £2500 (70% or £2,187.50 from September, dropping to 60% or £1,875 in October); this would be below their appropriate minimum wage.  

NWM does apply where the apprentice is conducting training; employers will need to make the additional payment. 

Can all temporary staff be furloughed ie. are those with an employment contract treated differently to those with a service contract?

Temporary employees can still be furloughed providing they were on the company’s PAYE payroll on 28 February 2020.

Can I be sued for breach of contract by someone I have offered a contract to but who had not started work by 28 February and who I therefore cannot furlough?

Not sued.  If there is under 1 months service, no notice pay either side is due by statutory law however termination payment may be due dependant on the contractual terms. The employer can either withdraw offer of employment or delay start date.  The employee can go back to their previous employer to be furloughed. 

Employers are not allowed to place an employee on periods of unpaid leave or holiday without the consent of the employee. If such action is required to maintain the solvency of a business, it should be done with the agreement of the employees (or their representatives).

Can firms insist that employees undertake personal development while on furlough?

Training is permitted providing the employee does not provide services to or generate revenue for the employer whilst undertaking it. If employees are required by you to undertake training (such as online training) while on furlough, they must be paid at least the National Living Wage/National Minimum Wage, even if that is more than the level of their 80% subsidised pay under the scheme.

If I want To Furlough Staff From July Onwards, do they have to have been on furlough leave between 10th and 30th June?  For example, if they were furloughed until the end of May and then came back to work at the beginning of June, will I be able to furlough them again, either full time or part time, from July onwards?

To enable the introduction of flexible furloughing the last date on which an employee can be furloughed for the first time for a claim to be made under the CJRS from 1 July is the 10 June (due to the requirement of a minimum 3 week furlough period).  On 30th June CJRS will close to any new employees other than employees returning from maternity, shared parental, adoption, parental bereavement or paternity leave.

From 1 July employers will only be able to furlough employees that have been furloughed for a full 3 week period prior to 30 June.  Therefore, any employee who has previously been furloughed should qualify for flexible furloughing from 1st July regardless of when that period was.