Can an employer extend a fixed-term contract that comes to an end while the employee is furloughed?

Yes. Guidance published by HM Revenue and Customs (HMRC) on the Coronavirus Job Retention Scheme states that employers can renew or extend a fixed-term contract that is due to come to an end during a period of furlough. The employer can continue to claim the lower of 80% of the employee's regular wages or £2,500 per month under the scheme. There is no requirement for the employer to show there was a business need to keep the employee on.