The guidance has helpfully clarified a number of issues relating to the Scheme and, significantly, has also made some changes to the previous guidance. Here, we have set out the key new points from the latest guidance. For a more detailed commentary on the Scheme, please see our recent update which sets out answers to the most frequently asked questions.


It has been clarified that Apprentices can now be furloughed along with other employees.

The guidance has now clarified that employees who stopped working for an employer on or after 28 February 2020 can be re-employed by them and put on Furlough Leave. It was unclear from the previous guidance whether this was only possible for employees who had been made redundant, so this clarification is welcome. However, there is no obligation on former employers to re-employ such workers. There are a number of significant consequences for former employers to consider before taking this step and we would recommend seeking further advice before agreeing to re-employ employees who were not made redundant.

The guidance has also made it clear that employees who are unable to work because they have caring responsibilities as a result of COVID-19 can be furloughed. This would include, for example, employees who need to look after children.

The guidance clarifies that Office Holders, Company Directors and salaried members of LLPs who are paid through the PAYE system can be furloughed.

For employers, there is an additional eligibility criteria which is that they must be enrolled for PAYE online. We are told this can take up to 10 days.

It has been clarified that individual employers (who, for example, might have employees such as nannies or carers) can furlough their employees provided they meet the other eligibility criteria.

Work that employees can undertake whilst on Furlough Leave

The guidance has clarified that employees can be furloughed in one job and receive a furlough payment but continue working for another employer and receive their normal wages.

The guidance makes it clear that employees can work for a new employer whilst they have been placed on furlough leave by an existing employer. However, the contracts of employment with the existing employer should be checked as this may prevent such work being undertaken. 

Work that directors can undertake whilst on Furlough Leave

The updated guidance states that where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company, they may do so provided they do no more than would be reasonably be judged necessary for that purpose; for instance, they should not do work of a kind that they would carry out in normal circumstances to generate commercial revenue/provide services to or on behalf of the company. This means that furloughed directors can perform necessary statutory duties to maintain the upkeep of the business, including legal filing and record keeping, but not their normal work, such as marketing activities, sales, staff meetings etc. 

This update is welcomed, however, this is clearly a bit of a grey area and more transparency is needed on what HMRC regards as “statutory obligations." For instance, it is questionable whether a director can still carry out their statutory duty to promote the success of the company (section 172 of the Companies Act 2006) with the limitation of not being able to generate commercial revenue or provide services.  Without clarity, this could lead to some confusion and future misunderstandings.

Procedures for employers to follow

The procedure to follow is set out in our previous update. What is new is that the guidance now states that employers must confirm in writing that employees have been furloughed and keep this record for five years.

Furloughing a director

If a director is furloughed under the scheme this should be documented and HMRC’s guidance recommends that, in addition to confirming in writing to the director concerned, that the decision is formally adopted as a decision of the company and noted in the company records.  Our corporate team can assist with this if necessary.

Calculation of furlough payment

Perhaps the most important change is that, previously, commission was not included in the calculation of furlough pay. The guidance now states that employees can claim for “regular payments you are obliged to pay to your employees”. This is stated to include “wages, past overtime, fees and compulsory commission payments”. It is not clear what this will cover and further guidance or legislation is needed. Some commentary has suggested that “compulsory commission payments” might mean contractual commission payments. How this will work in practice will be important to, for example, sales staff. What remains clear is that discretionary bonuses (including tips) and commission payments, and non-cash payments should be excluded.

It has been clarified that reference to salary for the purposes of calculating the grant does not include the cost of non-monetary benefits provided to employees, including taxable benefits in kind or benefits provided through salary sacrifice schemes (such as pension contributions).