Coronavirus Job Retention Scheme (‘CJRS’) FAQs

CJRS is the Government’s programme to help protect jobs during the Covid-19 pandemic given the restrictions placed on the economy and society in the hope of saving lives.

CJRS works by:

• The employer putting employees on “furlough” by ensuring a written furlough agreement is in place – this is vital in ensuring the furlough is effective.
• Furlough means the employee remains employed but is not able to undertake any employment duties at all whilst on furlough
• In exchange for this, the Government will pay employers a CJRS grant that does not have to be paid back
• The employer must pay the whole amount they receive from the Government for the individual employee’s pay to the employee. The employer can choose to top this up too.
• The employer claims the funding from the Government via HMRC’s online portal
• The employee is paid the amount via payroll, meaning no changes to pay periods or payroll process are required.

CJRS is available to qualifying employers and eligible employees between 1 March 2020 – 30 September 2021.

CJRS was originally available from 1 March 2020 – 31 October 2020. It was then extended from 1 November 2020 – 31 March 2021 to provide further support to businesses and their employees. It was then further extended on 17 December 2020 by The Chancellor to 30 April 2021. The 2021 Budget has then extended the support up until 30 September 2021 as part of helping the UK recover from the Pandemic.

We set out a summary table to highlight the funding available and minimum amounts that need to be paid to furloughed employees:

In order to be able to make a CJRS claim, employers need to have a PAYE reference (registered on or before 19 March 2020 for CJRS claims up to and including 31 October 2020, or registered on or before 30 October for CJRS between 1 November 2020 – 30 September 2021), qualifying UK employees and a UK bank account.

Eligible employees are the following:

For the period up to and including 31 October 2020

• On an RTI payroll submission on or before 19 March
• Furloughed for a consecutive period of at least 21 days / three weeks starting on or before 10 June (unless on qualifying parental or armed forces leave)

For the period from 1 November 2020 until 30 April 2021

• On an RTI submission on or before 30 October 2020

Please note that there is no requirement for an employee furloughed from 1 November to have been furloughed previously.

For the Period from 1 May 2021

• On an RTI submission to HMRC between 20 March 2020 – 2 March 2021.

Please note that there is no requirement for an employee furloughed from 1 May to have been furloughed previously.

No. Unlike other countries, the UK Government did not introduce turnover or specific tests that employers needed to meet in order to access Government support.

Initially, The Government set up CJRS to protect jobs and as an alternative to redundancy. However, the Government did expect employers not to be abusing the arrangement and using it fairly to support hose in most need.

The latest employee guidance states that CJRS can be used if employers have employees who “ are unable to operate or have no work…because of coronavirus”. It goes on to state that CJRS is designed to help employers whose operations have been severely affected and that the Government recognises that different businesses will face different impacts from coronavirus.

Therefore there is no strict rules prohibiting use of CJRS and employers should consider their reasons for using it carefully, documenting appropriately.

This is dependent on whether you consider if the employee is a fixed or variable pay worker and when the employee was first furloughed from – i.e. what their furlough “reference date” is.

It will be important to ensure this is clearly set out in a documented furlough agreement with each employee.  

HMRC has stated that they will accept the reasonable decision made by employers in respect of whether an employee is a variable or fixed paid worker. Typically, a fixed paid employee is one that receives the same payments regularly (i.e. receives a salary and car allowance each month); a variable paid employee is one that will receive varied payments each pay period due to being hourly paid, working overtime, and so on.

The pay you use is then dependent on when your employee was first furloughed (their reference date)..

Their reference date will be either

• 19 March 2020
• 30 October 2020; or
• 2 March 2021

The reference date will be 19 March 2020 where any of the following apply:

• A payment of earnings to the employee was reported in an RTI submission on or before 19 March 2020 for 2019/20 tax year.
• The employee was included in a valid CJRS claim for a claim period ending on or before 31 October 2020
• The employee was on their previous employer’s payroll on 28 February 2020, was transferred to their current employer after 28 February 2020 and the TUPE or business succession rules applied to the transfer for CJRS purposes

The reference date will be 30 October 2020 where the above does not apply and any of the following does apply:

• A payment of earnings to the employee was reported in an RTI submission between 20 March 2020 and 30 October 2020 (inclusive).
• The employee was included in a valid CJRS claim for a claim period between 1 November 2020 and 30 April 2020
• The employee was on their previous employer’s payroll on or before 30 October 2020, was transferred to their current employer after 31 August 2020 and the TUPE or business succession rules applied to the transfer for CJRS purposes

Where neither 19 March 2020 nor 30 October 2020 reference dates apply the employee is not eligible for periods starting before 1 May 2021. If a payment of earnings, reported on an RTI FPS, was made to the employee between 31 October 2020 and 2 March 2021 (inclusive) the employee may be eligible for including on a CJRS claim for periods starting on or after 1 May 2021.  The employee’s reference date will be 2 March 2021.

Now I know their reference date, what is their qualifying pay?

To work out qualifying pay for each reference date group, please follow the guidance below:

19 March 2020

• Fixed Paid worker - Use regular wages and other fixed payments based on pay received in the pay period on or before 19 March

• Variable Paid worker - Use variable non-discretionary payments (e.g. hourly pay, overtime, shift premiums, commission payments) based on the higher of:

1. Total qualifying pay received in the period in 2019/20 tax year prior to the date of furlough; or
2. The total qualifying pay received in the same corresponding pay period in 2019/20

30 October 2020

• Fixed Paid worker - Use regular wages and other fixed payments based on pay received in the pay period on or before 30 October 2020

• Variable Paid worker - use the average wages payable 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.

2 March 2021

• Fixed Paid worker - Use regular wages and other fixed payments based on pay received in the pay period on or before 2 March 2021

• Variable Paid worker - use the average wages payable between 6 April 2020 (or, if later, the date the employment started) and the day before they are furloughed on or after 1 May 2021.

An employee is fully furloughed if they are on furlough for the whole claim period, or where they return permanently during a claim period in which they were previously fully furloughed up to that date. For example, if an employee was furloughed from 1 November up until 10 December, they would be furloughed throughout the whole of the November claim period and fully furloughed between 1 – 10 December.

To calculate their furlough pay, the employer would be assessing the calculation on a “days” basis, rather than a Flexible Furlough “hours” basis. You can read a little more about this here.

If your employee is flexibly furloughed, you’ll need to work out your employee’s usual hours and record the actual hours they work as well as their furloughed hours for each claim period. Typically a flexibly furloughed employee will be working reduced working hours (e.g. doing say 8am – 12pm rather than 9am – 5pm or working every Monday and Wednesday rather than five days a week). Our previous article provides a summary of how to calculate Flexible Furlough for the period up to and including 31 October 2020.

To calculate hours worked for a furloughed worker, the following guidance below needs to be followed:

Fixed Hours worker

• Start with the hours the employee was contracted for at the end of the last pay period ending on or before the employee’s reference date (19 March 2020, 30 October 2020 or 2 March 2021). If they are flexibly furloughed, it will be important to then work out their usual hours by following the further steps below:
• Divide by the number of calendar days in the repeating working pattern, including non-working days.
• Multiply by the number of calendar days in the pay period (or partial pay period) being claimed for.

Variable Hours worker

For employees with a reference date of 19 March 2020, calculate ‘usual hours’ based on the higher of either the:

• average number of hours worked in the 2019/20 tax year
• hours worked in the corresponding calendar period in 2019/20 (from March 2021 onwards the 2019 tax year is to be used i.e. March 2019, April 2019, May 2019 and so on)

For other reference dates (30 October 2020 and 2 March 2021), ‘usual hours’ are based on the average number of hours worked in the period they worked from 6 April 2020 up to (and including) the day before the employee’s first day spent on furlough on or after either:

• 1 November 2020 (for those with a reference date of 30 October 2020)
• 1 May 2021 (for those with a reference date of 2 March 2021)

Usual Hours calculation for an employees with a reference date of 19 March 2020

It will be important to establish the higher of:

• average number of hours worked in the 2019/20 tax year
• hours worked in the corresponding calendar period in 2019/20 (from March 2021 onwards the 2019 tax year is to be used i.e. March 2019, April 2019, May 2019 and so on)

To work out the usual hours for each pay period (or partial pay period) based on the average number of hours worked in the 2019/20 tax year, follow the guidance below:

1. Start with the number of hours actually worked (or on paid annual leave or flexi-leave) in the 2019/20 tax year before the employee was first furloughed, or the end of the tax year if earlier.
2. Divide by the number of calendar days the employee was employed in the 2019/20 tax year, up to (and including) the day before they were first furloughed, or the end of the tax year if earlier.
3. Multiply by the number of calendar days in the pay period (or partial pay period) you’re claiming for.
4. Round up or down if the result is not a whole number.

Usual Hours calculation for an employees with a reference date of 30 October 2020 or 2 March 2021

For flexibly furloughed employees who have a reference date of either 30 October4 2020 or 2 March 2021, work out the usual hours for each pay period (or partial pay period) based on the average number of hours worked from 6 April 2020 (or the day the employee’s employment started if later) up to (and including) the day before the employee’s first day spent on furlough on or after 1 November 2020 or on or after 1 May 2021:

1. Start with the number of hours actually worked (or on paid annual leave or flexi-leave) from 6 April 2020 (or the day the employee’s employment started if later) and up to (and including) the date to calculate up to.
2. Divide by the number of calendar days the employee was employed from 6 April 2020 (or the day the employee’s employment started if later) – including non-working days – up until (and including) the date to calculate up to.
3. Multiply by the number of calendar days in the pay period (or partial pay period) being claimed for.
4. Round up or down if the result is not a whole number.

When calculating the number of calendar days in step 2 for all reference dates, do not count any calendar days where the employee was on a period of:

• statutory sick pay related leave
• family related statutory leave
• reduced rate paid leave following a period of statutory sick pay related leave
• reduced rate paid leave following a period of family related statutory leave

This is the period for which you are making a CJRS claim. Prior to 1 July, these could be for any length of time. However, from 1 July, these needed to be at least monthly, although could be shorter periods too if making claims on say a weekly basis for a weekly paid employee. However, the claims would need to start and end within the same month. Therefore, if weekly paid, two claims may be required if the week goes over two months (e.g. 28 September – 4 October, the claims periods would be 28 – 30 September, 1 – 4 October).

Typically, most employers have been making claims using monthly claim periods. Claims can be submitted up to 14 days in advance of the claim period end date. This helps ensure that the funds can be received in advance of paying the employee.

Identifying and deciding on the length of your claim period(s) is important as it can potentially mean calculations need to be performed using “days” rather than “hours” (i.e. avoiding the flexible furlough calculation requirements).

For claim periods starting on or after 1 July, you can download a template if you’re claiming for 100 or more employees and upload this when you claim. Using this template will help ensure your claim is processed quickly and successfully. Your template may be rejected if you do not give the information in the right format.

Claims need to be submitted as follows:

• For periods up to 30 June – by 31 July 2020
• For periods up to 31 October – by 30 November (claims must be separated into months (or periods within months) and cannot overlap between months)

From 1 November, claims must be made on a monthly basis by the following time periods:

CJRS is now key compliance area for HMRC. The interactions that have led to errors have included:

• Salary sacrifice – important that qualifying pay is the post sacrifice pay and that the employee receives post sacrifice pay at least equal to the CJRS wage claim received by the employer for periods when on furlough;
• CJRS when an individual is being made redundant/leaving employment – important they receive 100% of their pay for their notice whilst on furlough. However, HMRC has stated that any employee working their notice or being made redundant cannot be included in CJRS claims from 1 December.
• Interaction with sick and parental leave – you cannot claim CJRS for periods when the individual is recognised as being on sick leave / parental leave and under the relevant statutory provisions;
• Interaction with holiday / annual leave – individuals can be on furlough when taking holiday but this needs to be carefully assessed (i.e. you shouldn’t be on furlough just because holiday is being taken). Additionally, employees must receive at least 100% of their pay for holiday
• Managing and monitoring working time, particularly for those working remotely – this is really important to establishing that no work is being undertaken whilst on furlough and what hours constitute work. Having controls and processes in place to demonstrate and practically prohibit work during furlough is key – controls will vary depending on employment and context. This is also a key area to consider for National Minimum Wage compliance given the interaction with Flexible Furlough, working time and salary sacrifice. 
• Furloughing senior employees and office holders, particularly if certain duties may still need to be performed – Where furloughed directors need to carry out particular duties to fulfil the statutory obligations they owe to their company during hours which they are recorded as being on furlough, they may do so provided they do no more than would reasonably be judged necessary for that purpose, i.e. they should not do work of a kind they would carry out in normal circumstances to generate commercial revenue or provides services to or on behalf of their company.
• Training – Training can be undertaken whilst on furlough and the Government wishes to encourage this. However, where the time spent training attracts a minimum wage entitlement in excess of the furlough payment, employers will need to pay the additional wages (this may be in relation to an apprentice for example)
• You cannot claim for CJRS support for individuals who are paid gross off payroll. With IR35 and off payroll working regulation changes, it is recommended to review the employment status of those paid gross either via Personal Service Companies or directly. 

Previously it was had announced that employers would receive a £1,000 bonus per qualifying furloughed employee who was still in active employment as at 31 January 2021 (and receiving at least £520 per month in pay). However, this has now been cancelled indefinitely. 

Yes. With over £50bn claimed via the CJRS arrangement, HMRC has invested significant resource in reviewing compliance and whether employers have overclaimed through genuine mistake (this would be understandable given there has been over 130 changes to CJRS guidance) or whether there has been abuse/fraud in claims made. This type of behaviour and action will be strongly investigated and may require criminal prosecution.

For errors, there is a penalty regime and penalties could be up to 100%. It is recommended that employers proactively review claims and disclose voluntarily where mistakes are identified to mitigate the risks and demonstrate robust controls are in place. We are helping many employers review their claims.

Additionally, a Taskforce has been announced which will be resourced by over 1,200 HMRC officers to review abuse of Covid-19 support measures, including CJRS. 

Employees must be paid at least the NMW/NLW for pay reference periods in which they have working time. This will be more complex with employees who are on Flexible Furlough and particularly where salary sacrifice is processed.

Employers will need to ensure that all working time (including time spent washing hands / cleaning / hygiene needs) is considered for NMW purposes. Other areas to consider here relate to whether employees have been asked to purchased any equipment (i.e. certain type of face mask) and if this also could reduce an employee’s pay in a pay period.

Yes – CJRS is within SAO regulations and it will therefore be important that robust governance and policies are in place to manage compliance.

Where an Employer has agreed a deferral of their PAYE and NIC liability due to the Covid-19 outbreak, HMRC has confirmed that the deferral will not apply to furloughed employees’ tax/NIC and employer NIC (where the Government has paid this to the employer).

As one of the conditions for claiming a CJRS grant for an employee on furlough is that the employee ceases all work during the claim period, HMRC considers that whilst employees are on furlough they cannot be regarded as being engaged in relevant R&D activities during those times. This applies to both furlough payments met under the CJRS and to any ‘top-up’ from the company itself.

No – redundancy is a separate exercise and must be considered without reference to furlough.

As most employment contracts do not cover this scenario, employees cannot be forced to be furloughed. As furloughing is the alternative to redundancy, however, we would expect the majority to take this offer.

We outlined the Job Support Scheme (JSS) in a recent article (found here). However, due to the extension of CJRS, this has been indefinitely postponed. Therefore, JSS cannot be claimed and is not in use in any part of the UK.

Yes. HMRC is now publishing employer names, an indication of the value of the claim and, for companies and Limited Liability Partnerships (LLPs) the company registration number of those who have made claims under the scheme for the month of December onwards. . The first lists were published in early 2021.

However, HMRC will not publish details of employers claiming through the scheme if it can be demonstrated that publicising these would result in a serious risk of violence or intimidation to certain individuals, or any individual living with them.

This approach is being taken to help enhance compliance given the reports of non-compliance registered to date, including over 8,000 calls made to HMRC’s anonymous hotline to report employers who are not using furlough properly.

Yes. Definitely. It will be really important to demonstrate robust governance and ensure that no overclaims have been made. Carrying out a proactive review will be the best approach to help ensure no future HMRC compliance issues. We are helping many clients with this process including high level assessments, detailed calculation analysis and wider governance and SAO reviews.