What is CJRS?
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.
Coronavirus Job Retention Scheme FAQs
Broken out into the following categories:
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:
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
For the period from 1 November 2020 until 30 April 2021
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
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
The reference date will be 19 March 2020 where any of the following apply:
The reference date will be 30 October 2020 where the above does not apply and any of the following does apply:
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
30 October 2020
2 March 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
Variable Hours worker
For employees with a reference date of 19 March 2020, calculate ‘usual hours’ based on the higher of either the:
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:
Usual Hours calculation for an employees with a reference date of 19 March 2020
It will be important to establish the higher of:
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:
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:
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:
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:
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:
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.
Information contained in this presentation is confidential and is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. Please be aware that due to the nature and frequency of the announcements from the UK Government relating to the impact of Covid-19, information contained herein may change and require to be updated, and it should not be regarded as comprehensive or sufficient for making decisions.
This information should not be used as a substitute for consultation with a professional accounting, tax, legal or other competent adviser and specific advice in relation to your own affairs should be taken. Mazars LLP accepts no responsibility for any loss arising from any action taken or not taken by anyone using the material contained herein.
If you have any questions about this scheme or any others you may be eligible for, please do not hesitate to get in touch.
This website uses cookies.
Some of these cookies are necessary, while others help us analyse our traffic, serve advertising and deliver customised experiences for you.
For more information on the cookies we use, please refer to our Privacy Policy.
This website cannot function properly without these cookies.
Analytical cookies help us enhance our website by collecting information on its usage.
We use marketing cookies to increase the relevancy of our advertising campaigns.