Updated Payroll Guidance v3 9.4.20

Some of you will be aware that HMRC updated the job retention scheme guidance for a third time last night (Friday 1oth April).

There are a number of changes to the second version.  See attachments and notes below:

To summarise the key points:

  • They are maintaining the line that you can claim for employees who were on the payroll on the 28th February, which is in direct contradiction to what we have been told by HMRC via the EPG this week and was confirmed by Jim Harra in his webcast to MPs. This is extremely unhelpful when we are trying to make strategic decisions in our organisations
  • Still refers to those who have been made redundant after the 28th February as being able to be re-employed, remember this is the employer’s choice, not an employee’s right
  • Whilst unpaid leave as at the 28th February is still excluded, there is now clarity that those on statutory leave (maternity etc) are not included in this group. As we have been advising they can return and be furloughed. It says on the salary that they were on the same month last year or the average over 2019/20, I’ve no idea why it just doesn’t say their contractual salary on return as many people might be going part-time. I think we will use our common sense in this respect
  • Clarification that SSP can be ended in order for an employee to be furloughed in preference, obviously both can’t be claimed for the same period of time, this will be particularly helpful to employers not covered by the SSP rebate scheme. There is almost a tacit encouragement not to put somebody onto SSP who is furloughed and falls sick, which is welcome but rather surprising as from an HR perspective we would absolutely want to record the sickness even if we are claiming
  • Employees who are shielding or caring for somebody who is shielding can be furloughed
  • No issue with an employee being furloughed whilst working for another employer (a new or existing employer) – we knew this but it’s good to see it spelt-out again
  • It has now been confirmed that deemed employees (off-payroll workers in the public sector) can be both furloughed and money can be claimed for them if there is no public funding coming through to support their project work. In such cases, the contractor’s personal service company (PSC) must exclude any monies received from public sector engager when deciding to make a claim against any taxable income from private sector work received by the PSC
  • TUPE transfers from the 28th February onwards do not affect the ability to furlough and make a claim, neither do transfers between PAYE schemes in the same business
  • There’s clarity that you must not, of course, claim the 3% pension contribution if the employee is not in a pension scheme or alternatively pay a lot more than 3%
  • We are told that you will now need national insurance numbers and employee numbers to make a claim: we need to pursue this because not everybody has a national insurance number and many small employers don’t allocate employee numbers as they’ve no need to


At the same time, HMRC contacted the software developers with information about supporting customers to prepare to make claims from the 20th April.

  • The guidance has various calculation formulas for furlough pay, details attached to this email. I’ve spotted one mistake already as it says that the qualifying earnings band for pensions last year was £511, it wasn’t it was £512!
  • It confirms that any NI reclaim must exclude amounts being claimed under the employment allowance which is what we had expected but had not yet seen in writing


Best Wishes



Kate Upcraft AMBCS > Director > Kate Upcraft Consultancy Ltd

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