| 30 March 2020

Coronavirus support – Job Retention Scheme


Written by Support for Business

Employees discussing jobs

Job Retention Scheme



UK based businesses with a PAYE scheme will be able to access support through the Governments Job Retention Scheme.


The Scheme will allow businesses to receive support in paying employees' salaries for those who may have been at risk and laid off during the current Coronavirus (Covid-19) pandemic.


Organisations include:

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

PAYE payroll schemes must have been created on or before 28th February 2020 and have a UK bank account.


Any employee who has been asked to stop working working but has been kept on the payroll will be deemed as 'furloughed workers'. The government has instructed that HMRC reimburse 80% of their wages, up to a maximum of £2,500 per month. This is to safeguard workers from redundancy.


In addition to the 80% of an employees' wage (up to £2,500 per month), associated costs such as Employers National Insurance contributions and minimum automatic enrolment employer pension contributions are an addition which can be covered, but employers remain liable for the furloughed employees.


Furloughed employees must have been on your PAYE payroll on 28th February 2020. Contracts can be for:

  • Full time employees
  • Part-time employees
  • Employees with agency contracts
  • Flexible or zero-hour contracts

Any employees that were made redundant from the 28th February can be included in the scheme as long as they are rehired by their employer.


Clams will be back dated to 1st March 2020 and will run for 3 months initially with the option to extend if necessary.


It's important to note that employees are not allowed to work during the period of being furloughed.


More information on the Coronavirus (Covid-19) Job Retention Scheme can be found on the GOV.UK website.


The scheme has only recently been announced by Government and as more information is released we will endeavour to keep you updated with frequently asked questions.

Q) Can sole Directors of Limited companies be placed on furlough?

A) Yes they can, but they will need to follow a process of writing a letter to effectively place themselves on furlough, which means no work which generates or could lead to revenue can take place. Statutory duties such as pay bills, file accounts etc.


Q) Can dividends be included in the cost for working out what I should be paid?

A) Unfortunately dividends cannot be included, only salary paid through PAYE


Q) Do I need to pay 100% of the wages of an employee that is furloughed?

A) No you only need to pay 80% of the employees wages up to £2,500, whichever is the lowest. If you wish to top-up the salary you can, but this will not be reclaimable from the scheme


Q) My employee is refusing to be furloughed, what can I do?

A) If an employee is refusing to be furloughed then you can make them redundant or terminate their contract as long as you follow normal redundancy rules

Further Coronavirus support