The following information has been helpfully provided by Nick Dott, Chartered Accountant, McDaid & Partners ( and one of our Business Associates:

We would stress that the following isn’t finalised or official guidance yet, but we hope that it is useful to understand how the treasury and HMRC are planning the scheme to operate. More information should be confirmed hopefully by the end of this week:

The key considerations on the Job Retention Scheme are as follows:

  • If an employee has been furloughed, they can do no work meaning it may well be the case that employees can’t even look at or respond to a work email
  • If any element of employment duties are being performed it is likely to mean the employee will not qualify for the scheme
  • The 80% grant is going to be calculated by referring to a previous pay period. The previous reference period hasn’t been worked out yet and there is a desire to help seasonal workers, who traditionally have higher earnings in the coming spring and summer months
  • As the grant will be calculated from a previous pay period, increasing employee wages now will have no impact on what they would be paid with this scheme
  • The grant paid will be 80% of the reference period wage, plus employers’ NIC and the legal minimum pension contributions. For example, if the 100% wages per month are £1,000 and employers’ NIC was £115 and pension contribution £30, the total cost to the employer would be £1,145. It is this amount that the grant would be payable on. Therefore, in this situation, the maximum grant would be £916 per month
  • The employee is taxed to PAYE and employee NIC on the payment as normal
  • There may be some flexibility for a furloughed worker returning to work and then going back on furlough, but if any is provided, it will be limited
  • The view is that national minimum wage (NMW) will not apply as the employee will not be allowed to work. As NMW is concerned with working time, no work means any payment will be outside the scope of NMW. Therefore it will be quite possible for the 80% payment to take the employee below NMW. As an aside to this point, the employee could be eligible for universal credit if they are in this position