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COVID-19: Coronavirus Job Retention Scheme (CJRS) from 1 November 2020 - Updated: 7 June 2021
This is a guide to Coronavirus Job Retention Scheme (CJRS) from 1 November 2020.
What is CJRS? When does the CJRS apply? How to claim CJRS. How to calculate CJRS claim amounts.
COVID-19 measures are included in Budget 2021. This guide covers CJRS from 1 November 2020, for the previous version of the scheme see: Covid-19: CJRS to 31 October 2020.
This guide covers the Coronavirus Job Retention Scheme (CJRS) from 1 November 2020. For details of the previous version of the scheme see: COVID-19: Coronavirus Job Retention Scheme (CJRS) to 31 October 2020
On 27 May 2021
COVID-19 measures included in Budget 2021.
On 5 February 2021:
On 26 January 2021
On 5 January 2021
On 17 December 2020
On 2 December 2020
"You can only place employees on furlough if coronavirus (COVID-19) is affecting your operations.
You should not place employees on furlough just because:
To calculate how much can be claimed under the Coronavirus Job Retention Scheme it is necessary to work out:
Length of your claim period and claim rules
What you can include when calculating wages
The amount used when calculating 80% of employees’ wages for hours not worked is made up of the regular payments an employer is obliged to make, including:
Non-discretionary amounts include payments which the employer has a contractual obligation to pay and to which the employee has an enforceable right.
The following cannot be included when calculating wages:
The entirety of the grant received to cover an employee’s subsidised furlough pay must be paid to them in the form of money.
Where benefits are provided to furloughed employees, including through a salary sacrifice scheme, these benefits should be in addition to the wages that must be paid under the CJRS.
Usual hours and furloughed hours
Calculating usual hours: employees who are contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work
Calculating usual hours: employees who work variable hours
To work out the usual hours for each pay period (or partial pay period) based on the average number of hours worked in the tax year 2019 to 2020:
When calculating the number of calendar days in step 2, you should not count any calendar days where the employee was on a period of:
To work out the usual hours for a pay period or partial pay period based on the corresponding calendar period in the tax year 2019 to 2020:
If you have to work out the usual hours based on the hours worked in more than one pay period in the tax year 2019 to 2020:
To work out the usual hours for each pay period (or partial pay period) based on the average number of hours worked in the tax year 2020 to 2021:
When you calculate the number of calendar days in step 2, you should not count any calendar days where the employee was on a period of:
Calculating the number of working and furloughed hours for each employee
To calculate the number of furloughed hours:
If you claim in advance and your employee works for more hours than you agreed, then you’ll have to pay some of the grant back to HMRC. This means that you should not claim until you have certainty about the number of hours your employees are working during the claim period.
Calculating the number of working and furloughed hours for an employee that is furloughed or flexibly furloughed for part of a claim period
If your employee is only furloughed or flexibly furloughed for part of your claim period, when calculating the number of furloughed hours you can claim for make sure you:
This applies even if your claim period includes days before or after the employee’s furlough agreement (for example, because you’re claiming for multiple employees and some of them are furloughed for a different period).
HMRC Coronavirus Job Retention Scheme calculator
HMRC have provided a calculator to work out amounts that can be claimed.
Maximum wage amount
Working out 80% of an employee’s usual wage
It is necessary to work out 80% of an employee’s usual wages to determine:
You will need to identify the number of furlough days in the period. A furlough day means every calendar day within a period where the employee was either:
The way you should work out 80% of your employee’s usual wages is different depending on the way they’re paid. You must check what you can include as wages first.
Choose the calculation you think best fits the way your employee is paid, this might not be the same way that you have worked out their usual hours. For example, if you pay your employee a fixed regular salary, use the calculation for fixed pay amounts. HMRC will not decline or seek repayment of any grant based solely on the particular choice of pay calculation, as long as a reasonable choice is made.
80% of wages: employees on a fixed salary
To work out 80% of your employee’s wage:
80% of wages: employees whose reference period is not a full pay period or the pay frequency has changed
You will need to work out your employee's usual wages and then calculate 80% if:
To work out their usual wages and then calculate 80%:
80% of wages: If your fixed-rate employee’s first pay period ends after 30 October 2020
To work out 80% of the employee’s usual wages:
80% of wages: employees whose pay varies
To calculate 80% of the wages from the corresponding calendar period in the tax year 2019 to 2020:
If your employee did not work for you in the corresponding calendar period in the tax year 2019 to 2020, you can only use the averaging method to calculate 80% of their wages.
To work out 80% of the average monthly wages for the tax year 2019 to 2020:
Each day after the employee commenced employment with you is counted in making this calculation. This includes non-working days.
If your employee started working for you on or after 6 April 2019, you should not include the days before their employment started in your calculation.
To work out 80% of your employee’s average earnings for an employee who started working for you on or after 6 April 2019:
Every day after the employee commenced employment with you is counted in making this calculation. This includes non-working days.
To work out 80% of your employee’s average wages between 6 April 2020 (or, if later, the date the employment started) and the day before they are furloughed on or after 1 November 2020:
Variable-rate employee’s first wages payable after they begin furlough
You can claim for variable-rate employees whose first wages are not payable until after they begin furlough, if HMRC received the details of their wages on a PAYE Real Time Information (RTI) Full Payment Submission (FPS) on or before 30 October 2020 and the other eligibility conditions are met.
To work out 80% of the employee’s average wages between 6 April 2020 (or, if later, the date the employment started) and the day before they are furloughed on or after 1 November 2020:
Minimum furlough pay
The minimum furlough pay is the lesser of either:
If your employee is flexibly furloughed the minimum furlough pay depends on their working and furloughed hours.
This is the minimum amount you must pay your employee for the time they are recorded as being on furlough.
If any of the furlough hours are taken as paid holiday or annual leave, you need to top up the pay for these hours to the employee’s full contracted rate.
HMRC have provided a number of example calculations.
On 4 February 2021:
HMRC lists the following as areas where employers may make errors:
If, after reviewing these areas, you need to disclose an overclaim search for 'Pay Coronavirus Job Retention Scheme grants back' on GOV.UK.
Amounts can be disclosed and repaid if you are still making claims, if not a separate disclosure and repayment to HMRC is required.
[Employer name if not on headed paper]
Dear [Employee name]
[Due to the ongoing COVID-19 (Coronavirus) pandemic you have already been furloughed under the Coronavirus Job Retention Scheme. We have identified you as a suitable employee to remain furloughed.] OR [Due to the ongoing COVID-19 (Coronavirus) pandemic, we have [identified you as a suitable employee to be furloughed/agreed with you that you will be furloughed*] under the government's Coronavirus Job Retention Scheme]*.
You will continue to be paid [as normal/and will receive 80% of your normal pay [for hours not worked]/and will receive pay of £2,500 per month]***
Income tax and national insurance will be deducted from your pay as normal.
You will continue to be our employee during the furloughed period.
Your furlough period starts on [start date]. It will end on the earlier of:
We expect the period not to exceed five months. This may be extended if government restrictions mean that it is not possible for you to return to work.
[During your furlough period you will be required to work [insert number of hours]** per week/month]*. OR [The number of hours that you will be required to work during your furlough period will be agreed with you in writing at the start of each week/month]*
[As already discussed we agree that you may other undertake paid temporary work/and unpaid voluntary work during your furloughed period]*
We will contact you when you are required to return to work.
[Please sign the attached form to confirm your agreement to being a furloughed employee and return to [name of the appropriate person/address or email address] by [date]****.
Notes for completion - DELETE BEFORE SENDING
*Delete as appropriate.
** Insert the number of hours you require the employee to work per week or month. If this will change you should agree this with the employee and issue them with a new letter accordingly.
***Only use the £2,500 per month option where employee earnings are such that 80% of their normal gross pay is more than £2,500 per month and they are not flexibly furloughed.
You will not need your employee’s agreement to the furlough if:
• They will continue to receive their full pay.
• Their contract allows you to reduce their pay if there is no work for them.
****It is recommended that you set a deadline for responses.
A form for a furloughed employee to return to the employer
I [Employee name and works/employee number (if they have one)] consent to being a furloughed employee until such time as I am asked to return to work.
I understand that I remain an employee of [insert name of employer] and must continue to adhere to the terms of my employment other than by prior agreement with my employer.
Who can be furloughed?
Can your employee work when furloughed?
Can employees be furloughed where their health has been affected by Coronavirus or other conditions?
Can employees who have stopped working or been made redundant be re-employed and subsequently furloughed?
How long can furlough last?
What needs to be agreed to furlough employees?
The employee does not have to provide a written response.
The terms of any agreement must:
Where consistent with employment law, any flexible furlough or furlough agreement made retrospectively that has effect from 1 November 2020 will be valid for the purposes of a CJRS claim as long as it is made according to the conditions above.
Only retrospective agreements put in place up to and including the 13 November 2020 may be relied on for the purposes of a CJRS claim.
What employee rights do those on furlough have?
Furloughed employees still have the same rights at work, including:
Employers can continue to claim for a furloughed employee who is serving a statutory notice period, however, grants cannot be used to substitute redundancy payments. HMRC will continue to monitor businesses after the scheme has closed.
For claim periods starting on or after 1 December 2020, employers cannot claim for any days on or after that date during which employees are serving a contractual or statutory notice period (this includes people serving notice of retirement or resignation).
How does holiday pay interact with furlough?
How does furlough work for employees returning from leave?
Administration and how to claim
Employers may claim and pay a Coronavirus Job Retention Scheme (CJRS) grant to their employees instead of making them redundant, due to the adverse effects of the coronavirus.
This tracker covers measures announced by the government to support individuals and businesses, as we get through COVID-19.
Many small companies are run by just one or two directors and have no other employees. What government financial support is available to directors/shareholders during the coronavirus crisis?
As changes to the CJRS made be made at short notice, we recommend referring to these HMRC guides for the most up-to-date information and for further detail in respect of less common scenarios which may not be covered in our guide above.
At a glance
Letter to employee - from 1.11.20
Employee response form
61 Friar Gate Derby DE1 1DJ
Registered to carry out audit work Association of Chartered Certified Accountants.
www.auditregister.org.uk under number 8011438