Other types of employees you can claim for
Updated 22 April 2021
© Crown copyright 2021
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/individuals-you-can-claim-for-who-are-not-employees/individuals-you-can-claim-for-who-are-not-employees
1. Office holders
Office holders can be furloughed and receive support through this scheme. The furlough, and any ongoing payment during furlough, will need to be agreed between the office holder and the party who operates PAYE on the income they receive for holding their office. Where the office holder is a company director or member of a Limited Liability Partnership (LLP), the furlough arrangements should be adopted formally as a decision of the company or LLP.
2. Company directors
As office holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.
Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company during hours which they are recorded as being on furlough, they may do so provided they do no more than would reasonably be judged necessary for that purpose – they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.
This also applies to salaried individuals who are directors of their own personal service company (PSC).
3. Company directors with an annual pay period
You can claim CJRS in respect of employees who are paid annually, as long as they meet the relevant conditions.
An employer can make their claim in anticipation of an imminent payroll run, at the point they run their payroll or after they have run their payroll.
You can only claim in advance if the payroll run is imminent, and claims must be submitted by the relevant claim deadline. This means that you might need to pay any annually paid employees earlier than usual for any time they are on furlough.
You must have made an RTI submission between 20 March 2020 and 30 October 2020 notifying HMRC of a payment of earnings to that employee.
The requirement for there to be payment of earnings between 20 March 2020 and 30 October 2020 applies for any employee being claimed for under the scheme, irrespective of how frequently they are paid (for example, weekly, fortnightly or monthly). This will be relevant for those on an annual pay period if the last payment notified to RTI was before 20 March 2020 and no further payments were notified before 30 October 2020.
4. Salaried members of Limited Liability Partnerships (LLPs)
Members of LLPs who are designated as employees for tax purposes (‘salaried members’) under the Income Tax (Trading and Other Income) Act (ITTOIA) 2005 are eligible to be furloughed and receive support through this scheme.
The rights and duties of a member of an LLP are set out in an LLP agreement and in the absence of an agreement, default provisions in the LLP Act 2000, based upon company and partnership law. Such an agreement may include separate agreement between the LLP and an individual member setting out the terms applicable to that member’s relationship with the LLP.
To furlough a member, the terms of the LLP agreement (or any such agreement between the LLP and the member) may need to be varied by a formal decision of the LLP, for example to reflect the fact that the member will perform no work in the LLP for the period of furlough, and the effect of this on their remuneration from the LLP. For an LLP member who is treated as being employed by the LLP (in accordance with s863A of ITTOIA 2005), the reference salary for this scheme is the LLP member’s profit allocation, excluding any amounts which are determined by the LLP member’s performance, or the overall performance of the LLP.
5. Agency Workers (including those employed by umbrella companies)
Where agency workers are paid through PAYE, they are eligible to be furloughed and receive support through this scheme, including where they are employed by umbrella companies.
Furlough should be agreed between the agency, as the deemed employer, and the worker, though it would be advised to discuss the need to furlough with any end clients involved. As with employees, agency workers should perform no work for, through or on behalf of the agency that has furloughed them during hours which you record them as being on furlough, including performing such work through or on behalf of the agency for the agency’s clients.
Where an agency supplies clients with workers who are employed by an umbrella company that operates the PAYE, it will be for the umbrella company and the worker to agree if the worker will be furloughed.
6. Limb (b) Workers
Where Limb (b) Workers are paid through PAYE, they can be furloughed and receive support through this scheme.
Those who pay tax on their trading profits through Income Tax Self-Assessment, may instead be eligible for the Self-Employed Income Support Scheme, announced by the Chancellor on 26 March 2020.
Read more information on the Self-Employed Income Support Scheme, including eligibility criteria and how to claim.
7. Contingent workers in the public sector
The Cabinet Office has issued guidance on how payments to suppliers of contingent workers impacted by Coronavirus (COVID-19) should be dealt with where the party receiving the contingent worker’s services is a Central Government Department, an Executive Agency of a Central Government Department or a Non-Departmental Public Body.
Read more information on contingent workers impacted by COVID-19. This guidance applies to agency workers paid through PAYE, as well as those paid through umbrella companies on PAYE and off-payroll workers supplying their services through a PSC.
8. Contractors engaged with the public sector, or by a medium or large-sized organisation, in scope of off-payroll working (IR35) rules
Contractors engaged with the public sector, or by a medium or large-sized organisation, who are deemed employees according to the off-payroll working rules, might be eligible for this scheme.
Public sector bodies will follow the Crown Commercial Services guidance in the vast majority of cases. In a small number of cases (for example, where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with COVID-19 response), it may be appropriate to claim under the Coronavirus Job Retention Scheme.
If a client organisation wants to furlough a contractor in scope of the off-payroll working rules, they must confirm this with both the contractor’s PSC and the fee-payer ,as set out in the off-payroll working rules (usually the agency paying the contractor’s PSC). It should be formally agreed between these parties that the contractor will do no work for the client organisation during the hours they’re furloughed.
The fee-payer would be able to apply for the furlough payment of 80% of the monthly contract value, up to a maximum of £2,500, as well as the employer National Insurance contributions on that subsidised wage. The fee-payer would then pay at least the amount of wage-grant received to the PSC, and report the payment via PAYE using the contractor’s details, making the usual tax and National Insurance contributions deductions for contracts in scope of the off-payroll rules. The PSC would then be required to report the amount it pays to the contractor as deemed employment income via PAYE using box 58A on the PAYE Real Time Information return.
Where a contractor is continuing to receive payments from a client organisation (including through the Coronavirus Job Retention Scheme or other any other scheme), income from this client organisation should be excluded from any calculation of the reference pay for the purposes of the scheme if the contractor also decides to furlough themselves as an employee or director of their own company.