To ask the Chancellor of the Exchequer, if he will issue guidance on the Coronavirus Jobs Retention Scheme for umbrella companies on whether they can claim 80 per cent of average take home pay for contract workers in furlough, and if he will make a statement.
12 May 2020
The Coronavirus Job Retention Scheme (CJRS) covers employees on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts. It covers agency workers (including those employed by umbrella companies), so long as the other eligibility conditions of the scheme are met.
Employers should follow HMRC’s comprehensive online guidance in order to calculate the correct reference pay. This guidance can be applied to all forms of employment contract.
Where an employee has been paid a variable amount, the reference pay is calculated by looking at the average pay over the financial year 2019/20, or in some instances by means of a one-year look-back test. Only payments that the employer was obliged to make should be included.