We summarise the latest changes/clarifications to the Furlough Scheme ('Scheme') published by HMRC on 9 April.


  • Employers can furlough employees on any type of employment contract including full-time, part-time, agency, flexible or zero-hour contracts. As furlough grants are not deemed to be "access to public funds", those on all categories of visa can be furloughed. 

Sick leave and SSP 

  • Unlike the previous iterations of guidance, employers can furlough those employees who are on sick leave including those shielding and on long-term sick leave. In considering whether to furlough those on sick leave, the guidance cautions against furloughing employees because of their sickness meaning be vigilant of discrimination concerns. 
  • The interaction of furloughed employees and SSP is more nuanced. In essence, those who were receiving sick pay before being furloughed can no long receive sick pay once furloughed but are only entitled to furloughed wages. For employers befitting from the SSP rebate scheme (i.e. 2 weeks SSP refund in line with the amended SSP regulations) can no longer benefit if the employee in question is then furloughed. This is designed to ensure that both employee and employer cannot benefit from the state in respect of both furloughed wages and their sick pay. 
  • If a furloughed employee becomes sick during furlough leave (this scenario is different from above which envisages where employer is contemplating putting those already on sick leave into furlough), then the employee is entitled to SSP, according to the guidance. However, the guidance then states that "It is up to employers to decide whether to move these employees on to Statutory Sick Pay or keep them on furlough, at their furloughed rate". The implication is that once a furloughed employee becomes sick, the employer can continue to pay the employee furlough pay or move them out of furlough and pay them SSP. The latter is unlikely to be agreed by the employee during furlough leave so we recommend that these scenarios are agreed beforehand in a furlough agreement. 
  • In a change of position from the previous iteration, those shielding in line with public health guidance can be furloughed without any further qualification. 

TUPE transfer 

  • A transferee which is taking on employees from a transferor after 28 February 2020 who had already placed their employees on furlough leave are entitled to claim from the Scheme if their the TUPE or PAYE business succession rules apply to the change in ownership. 
  • With multiple PAYE schemes where there is a transfer of employees from these schemes into a new consolidated PAYE scheme after 28 February 2020, the new scheme will be eligible to furlough those employees. 

Wage costs 

  • The maximum level of grant for employer pension contributions on subsidised furlough pay is set in line with the minimum automatic enrolment employer pension contributions of 3% on qualifying earnings. Grants for pension contributions can be claimed up to this cap provided the employer will pay the whole amount claimed to a pension scheme for the employee as an employer contribution. 

Still yet to be clarified 

  • Holiday issues still remain unclear, namely:
    • Whether taking holidays during furlough leave (whether by their own accord or from a request by the employer) can interrupt the minimum furlough period of 3 weeks. 
    • Whether employers can require employees to take holidays under WTR during furlough leave. 
    • At what rate holiday should be paid during furlough leave.

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