Furlough for IR35 workers in the Public Sector

Updated: May 14

The Cabinet Office has confirmed that the coronavirus job retention scheme will also apply to off-payroll contractors working for public sector organisations.


Guidance notes published by the Cabinet Office clarify that the furlough scheme announced on 26 March will include, for example, those working for local libraries and museums which have had to close during the COVID-19 pandemic.


Some of these individuals will work as contingent workers, being on short term or variable hours contracts. A number of these will have been working through personal service companies before the off-payroll working law change in April 2017 and will now be paid under deduction of PAYE, while not having full employee status.

This means that the scheme can now be offered to those individuals:

  • working through a personal service company,

  • for a public sector client,

  • where the worker is unable to carry on working due to the COVID-19 pandemic.


Furlough can now be offered to all such public sector workers, described as contingent workers in the announcement, including those being paid under PAYE, through an umbrella or their own personal service company.

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