This is a question many employers are wrestling with at the moment and it is important because it could impact on whether or not they receive the job retention scheme grant for their furloughed employees. Making mistakes in this area could jeopardise qualification for the grant or result in funding having to be repaid following an HMRC audit.
The headline is that employees are not allowed to perform any work for the employer that has placed them on furlough leave, but there are some limited exceptions to this.
What are the exceptions?
- Employees can take part in training that assists them to perform their role or enhances their knowledge in their sphere of expertise. This is positively encouraged by the Government.
- Employees are allowed to perform voluntary work for their employer, but not if that voluntary work is the same as the employee’s normal duties of employment. For obvious reasons, that would be seen as abusing the grant scheme.
- Directors and office holders are allowed to perform the statutory duties of their position. For instance, a director would be allowed to maintain the accounts, keep up with statutory filings and keep an eye on the business premises, etc. They must not perform any duties that might generate income for the business.
Frequently asked questions
Can furloughed employees volunteer for other organisations?
Yes, provided this is cleared first with the employer that has placed them on furlough.
Can furloughed employees take on another employed role?
Again, yes, provided this is cleared first with the employer that has placed them on furlough. It is anticipated that many employers will not want to give this authority because they will want to retain the flexibility to be able to call back furloughed employees at a moment’s notice.
Can directors of personal service companies be placed on furlough?
Yes, provided they only perform their statutory directorial duties, as described above.
If an individual has two or more employments, can they continue to work in their other employments if they have been placed on furlough by one of their employers?
Yes, absolutely.
Can training not directly related to the employed role be performed?
Yes, but any expense incurred will not be tax deductible by the employer if they agree to fund such training.
Can the employer communicate with employees whilst they are on furlough?
Yes, continued communication is encouraged to maintain close links with employees. Isolation is a major factor in mental health problems, so furloughed employees should not be made to feel they have been forgotten. Employers cannot ask furloughed employees to provide job related services though.
Brian Jukes is Dafferns’ Corporate Tax Partner – please get in touch if you need help or advice.
