In The News

ASE Coronavirus Update

Article Date: 06 April 2020

On 4th April the Government published an update on the Coronavirus Job Retention Scheme.

The full details of the changes are set out below.

Guidance - Claim for your employee’s wages through the Coronavirus Job Retention Scheme

Guidance - Check if your employer can use the Coronavirus Job Retention Scheme

Summary of Changes

The changes include clarification of the following points;

  1. To be eligible for the “furlough payments” an employee must not work. This is now clearly defined as;
  • Not make money for the organisation
  • Not provide services for the organisation

Where this occurs, even if the individual does so even if the employee is not a full time employee, no furlough payments will be possible.

  1. Training / Apprenticeships

These are not considered activities that breach the rules that define working such that as far as possible these activities, in so far that they can continue, are encouraged.

  1. Company directors, salaried partners of LLP’s and Agency Workers (including those who are employed by umbrella companies) are eligible to be furloughed.
  1. Most importantly, salary is now redefined to include overtime, fees and contractual commission / bonus payments (as opposed to discretionary bonus payments) but exclude the cost of non-monetary benefits such as benefits in kind.
  1. In order to be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed.

A record of this communication must be kept for five years.

  1. To enable the furlough system to operate, an employer must be enrolled for PAYE on line. If this is not the case, employers must do so using the link below; it can take up to 10 days for this to become active.


These clarifications are extremely helpful and will provide relief for many employees and employers alike. In particular, the confirmation about the nature of salary that can be furloughed, to include contractual payments that form the essential ingredient of the sales workforce, is very welcome as it was by far and away the most problematic issue for dealerships. Many were rightly concerned that our interpretation of the inclusion of commission payments within earnings was not included in the government guidance and it is very pleasing to see that amend.

The guidance can still be read as somewhat contradictory, excluding discretionary bonuses from earnings. Our interpretation is that :

  • Normal commission payments for salespeople for sales of cars, add-on products will be included as they were contractual by way of either a formal pay-plan
  • This would not include top-up bonuses, or gifts, where a salesperson has their salary topped up, to keep them motivated, without having hit targets
  • The position of the allocation of “house deals” is therefore questionable

It is up to each retailer, knowing the evidence they have to be able to respond to any subsequent questions from HMRC to determine the extent to which the commissions are compulsory.

Having overcome this significant concern, we still have a major issue with timing. There is still no news as to when the “portal” will open to collect the payroll data, nor is there any new proposals setting out how and when payments will be made available. Dealer groups should be planning to have to make the April salary payments without receipt of the furlough cash in case the government systems do not mobilise fast enough.

Finally, the nature of furlough payments has touched on a raw nerve over the weekend with the debate centring upon Premier League Football Clubs and their intention to furlough non-playing staff whilst maintaining the salaries of footballers. It raised the question of ethics and doing the right thing with regard to furlough payments. This is less obvious a banana skin for motor retail groups, however the cash-rich, well-funded businesses should be aware of any potential PR backlash.

The nature of the multiple audiences watching a business and their decisions makes corporate life that much more complicated. It makes the decision as to furloughing staff very important because great damage can be done before a business has a chance to explain what they have done and why. Public opinion, even if it is based upon inaccurate information (fake news?) can be very powerful and difficult to reverse.

Notwithstanding, what is important is to achieve the original aim; to protect businesses and jobs and ensure that we are in a position to resume business once the crisis passes.

If you have additional questions which have not been addressed above please contact Chris Cummings on 07896 117908 or by email