Coronavirus Job Retention Scheme (CJRS)
What is the Coronavirus Job Retention Scheme?
It is a government grant that will reimburse employers for 80% of a furloughed employee’s gross salary. The maximum grant is £2,500 per month, plus the associated employer’s national insurance and employer’s pension contributions.
Who is eligible for the CJRS?
All UK employers who were operating a PAYE payroll scheme on the 28th February 2020 are eligible for the CJRS including small or large, charitable or non‐profit businesses.
What does furlough employee mean?
Furloughed employees are employees who are kept on the payroll but do not work for the employer during the period of furlough. Furloughed employees will need to be completely inactive to qualify for CJRS.
Are employees on zero-hour contracts covered by the CJRS?
Yes, full time, part-time, employees on agency contracts and employees on a flexible or zero-hours contract will be eligible. Only employees who were working for you before the 28th of February 2020 can be furloughed.
Do I have to place all employees on furlough?
No, you do not have to place all your employees on furlough.
Can employees be moved in and out of being furloughed?
Yes, to qualify for CJRS furloughed employees must be furloughed for a minimum of 3 weeks. After that, they can be furloughed for another 3 weeks or return to work. If they return to work, you must pay them their contractual wage and you cannot claim it
back. If you wish to extend the furlough leave after the 3 weeks have passed or the employee returns to work you must submit another claim.
Can I still claim CJRS if I have reduced the employees working hours?
No, you cannot claim furlough pay and still have the worker engaged in work for you.
What is the furlough process?
You will need to contact each employee and specify the reasons you would like to put them on furlough leave. This should be done in writing and ask them to sign an agreement relating to the furlough status and reduced pay.
What do I need to do to receive the grant?
Determine which employees to furlough and submit information to HMRC relating to who these employees are and their earnings through a new online portal which is currently in the process of being set up by HMRC. You will need to pay the furloughed employees through payroll as usual.
When will the new portal be open?
It is expected that the portal will be available by the end of April and claims can be back dated to 1 March but only for employees who have been made redundant due to declining business as a result of COVID‐19.
What information do I need to make a claim?
- ePAYE reference number
- the number of employees being furloughed
- the claim period (start and end date
- amount claimed (per the minimum length of furloughing of 3 weeks)
- bank account number and sort code
When will we receive reimbursement under the CJRS?
The government expects the CJRS will be paid out to employers by the end of April.
What is considered to be wages?
Wages do not include commission, fees or bonuses.
How will the scheme work for full time and part-time employees?
For full time and part-time salaried employees, the employee’s actual salary before tax, as of 28 February should be used to calculate the 80%.
How will the scheme work for the employees with flexible or zero-hour contracts?
Employees who have more than 12 months of service. The grant will be the higher of:
A) The same month’s earnings from the previous year
B) Average monthly earnings for the year 2019‐20.
Employees who have less than 12 months of service. The grant will be the average of their monthly earnings since the start of their employment. Employees who started work in February 2020 – the grant will be based on a pro‐rata of
Are directors eligible for the scheme?
Yes. Directors may be eligible for the scheme, but this is only if they do not perform any revenue-generating activity. They may still deal with the statutory duties such as filing and admin as this will not be considered as revenue-generating. In which case, 80% of the salary will be funded by the scheme. Dividends are not included.
What if an employee is off sick?
Employees on sick leave or self‐isolating should get Statutory Sick Pay, but can be furloughed after this. Employees who are shielding following public health guidance are also allowed to be furloughed.
Are furlough payments taxable for the employer?
Yes. The furlough payments are taxable grants, you will either pay corporation tax (company) or income tax (self‐employed).
Are the furlough payments taxable for the employee?
Yes. The employee will have an income tax and national insurance contributions deducted from their wages in the usual way.
Can I be furloughed from all my employments
Yes. There is no restriction on how many employers can make you furloughed. The restriction is on the amount you receive, i.e. capped to £2,500 per employment.
Do I have to top up 20% of the employees’ wages?
No. There is no need to top up the extra 20%.