UK: Updated HMRC guidance on job retention scheme (COVID-19)

UK: Updated HMRC guidance on job retention scheme

HM Revenue & Customs (HMRC) updated guidance under the job retention scheme (JRS)—a program established to provide economic relief to businesses as they support employees with payments as a response to the coronavirus (COVID-19) pandemic—to reflect anticipated changes.


The changes appear to concern the introduction of language that revises what employers must do when calculating a claim if an employee stops being furloughed, or flexibly furloughed, partway through a claim period.

The following language has been added to the HMRC guidance on steps to take before calculating claims and calculating how much to claim:

Calculating the number of working and furloughed hours for an employee that comes off furlough or flexible furlough partway through a claim period. If your employee stops being furloughed or flexibly furloughed partway through a claim period, when calculating the number of furloughed hours you can claim for, make sure you:

  • Only calculate the employee’s usual hours up to the last day of furlough, instead of to the end of the claim period; and
  • Do not include any working hours after the last day of furlough.

This applies even if your claim period includes days after the employee’s last day of furlough (for example, because you’re claiming for multiple employees and some of them stay on furlough).

You do not need to amend any previous claims submitted prior to 14 September 2020 for these employees. You should use this calculation for any claims from 14 September 2020, for an employee who stops being furloughed or flexibly furloughed partway through a claim period.

KPMG observation

HMRC’s updated guidance does not specify what “come off” furlough means, nor does it address whether having come off furlough, it is possible in HMRC’s view, to go back on furlough. Similarly, it is not immediately clear whether any employees who might have been disadvantaged under the old approach, could compel their employer to amend historic claims. It may be that until HMRC confirms these points, it may be likely that this will depend on the legal documentation and communications that were given to employees.

In principle, this is a welcome simplification. However, employers must confirm the specific implications for them based on the wording of their own flexible furlough agreements and any other correspondence with employees who return to work.

Read a September 2020 report prepared by the KPMG member firm in the UK

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