Job Retention Scheme

Latest updates:
For February 2021 how do I calculate 80% of the wages for monthly variable pay employees from the same period in the previous year? 

Published guidance

HMRC has published on GOV.UK guidance for employees and employers on the Job Retention Scheme, and there is a central collections page of guidance which would be a useful page to bookmark. This guidance has been updated a number of times since its initial publication on 26 March and previous versions can be found on the National Archives website. It includes detailed guidance around which employees and employers are eligible for the scheme, how much can be claimed and what information will be required to make a claim. It also includes guidance on how to:

HMRC has also published a step by step guide for employers.

calculator is also available to assist in working out how much can be claimed, and can help calculate the claim for most employees who are paid either regular or variable amounts each pay period.

HMRC has also published some information for agents to explain who is authorised to submit the claim, and how to become authorised if not authorised already.

The Cabinet Office has published guidance for public sector contractors, in particular payments to suppliers for contingency workers impacted by COVID-19.

Tarlochan Lall, Barrister, Monckton Chambers, considers the scheme’s features and associated legal issues in this article.

The House of Commons Library has published a briefing paper ‘FAQs: Coronavirus Job Retention Scheme’, updated as at 16 June 2020. 

Legal basis

The legal basis for the Coronavirus Job Retention Scheme has been set out in a number of Treasury Directions under Sections 71 and 76 of the Coronavirus Act 2020. Broadly speaking, these set out that HMRC are responsible for the payment and management of amounts to be paid under the Coronavirus Job Retention Scheme, and the legal framework for the Scheme. The latest Treasury Direction is dated 25 January 2021, setting out the scheme applying for the period beginning on 1 February 2021, and ending on 30 April 2021. Due to the overlap with the CJRS that was introduced in March 2020, this Direction modifies the rules to calculate the reference salary and usual hours.

Regulations have been laid to prevent an employee from experiencing disadvantage in relation to family-related statutory payments and Maternity Allowance as a result of their being placed on temporary leave under the Coronavirus Job Retention Scheme. More information can be found here.

Status / response
How long will the scheme run for?
The scheme will remain open until 30 April 2021.
How much must the employee be paid, and how much will it cost the employer?
The employee must receive at least 80% of their salary whilst on furlough, so in September and October, when the amount of government support in relation to the employee’s wages reduced, the employer must top up by at least 10% and 20% respectively.
In July to October the amounts of government support per employee are as follows:
July - 80% of wages up to a cap of £2,500, PLUS Er NICs, PLUS pension contributions
August - 80% of wages up to a cap of £2,500. NO Er NICs or pension will be reimbursed.
September - 70% of wages up to a cap of £2,190. NO Er NICs or pension will be reimbursed.
October - 60% of wages up to a cap of £1,875. NO Er NICs or pension will be reimbursed.
In November 2020 to April 2021 the government support means that employees can receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked. Employers will need to pay employer NICs and pension contributions for their employees on the full amount that they pay the employee.
Are there any new eligibility rules for the November to January April?
You can claim for employees who were employed on 30 October 2020, as long as you have made a PAYE RTI submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee (though see below for employees made redundant). Employees can be on any type of contract and employers will be able to agree any working arrangements with employees.
What if an employee has been made redundant, or had otherwise stopped working for the employer. Can they be re-employed and claimed under the scheme?
If you made employees redundant, or they stopped working for you on or after 23 September 2020 you can re-employ them and put them on furlough. This applies as long as the employee was employed and on your PAYE payroll on or before 23 September 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made between 20 March and 23 September 2020.
When can claims be made for October to April?
The closing date for claims up to and including 31 October is 30 November 2020.
The closing dates for subsequent claims are as follows:
November 2020 - 14 December 2020
December 2020 - 14 January 2021
January 2021 - 15 February 2021
February 2021 - 15 March 2021
March 2021 -14 April 2021
April 2021 – 14 May 2021
HMRC state that introducing a 14-day deadline ensures that the government can more regularly and accurately see and react to the impact of coronavirus on businesses and individuals. HMRC’s data suggests that most employers have made their claim within 14 days each month.
Can I amend or correct a previous claim?
If you have made an error in a CJRS claim that means you received too much money, you must pay this back to HMRC.
If you have underclaimed your CJRS grant you should contact HMRC on 0800 024 1222. You should still pay your employee the correct amount.
If you have made a mistake on a claim it can be deleted up to 72 hours after it has been made. 
What if the employee has undertaken work, even though the employer put them on furlough?
We have checked the position with HMRC, who confirmed that if the employee undertakes work, even if without the employer’s knowledge or permission, the conditions for the grant have been breached. The employer will need to calculate whether any of the grant can be retained (eg considering the dates work was undertaken) and any repay any amounts which have therefore been overclaimed.
What if I’ve claimed too much in error?
You must tell HMRC if you were not eligible for the grant, either at the time you claimed it, or circumstances changed meaning you were no longer entitled to keep all or part of it.
You must tell HMRC within:
  • 90 days after you receive the CJRS grant you’re not entitled to
  • 90 days after the date circumstances changed so that you were no longer entitled to keep the CJRS grant.
You must then pay this back to HMRC.
If you do not you may have to pay a penalty. Further information about assessments and penalties is in HMRC's compliance factsheet CC/FS48.
What if I haven’t claimed enough? 
If you or your client has made a mistake in a claim that means you received too little money, you’ll need to amend it within 28 calendar days after the month the claim relates to – unless this falls on a weekend or bank holiday, in which case the deadline is the next weekday. The deadline to amend claims for November is Tuesday 29 December.
What if I haven’t paid my employees enough?
Where the employer has paid employees less in furlough pay than they were entitled to under the scheme that would invalidate the claim in respect of those employees affected and could result in an income tax charge arising under paragraph 8, Schedule 16 of the Finance Act 2020, to recover the grants paid in respect of those employees.
HOWEVER, the employer has a ‘reasonable period’ in which to pay the employee the shortfall to prevent the income tax charge arising. The term ‘reasonable period’ is not defined in the Finance Act. HMRC’s practice under its care and management powers, where claimants have underpaid by reason of error or mistake, is to treat the reasonable period as ending, for companies, on the expiry of 12 months from the end of the accounting period in which the grant was received, and for other businesses on 31 January after the end of the relevant tax year; or the date when an assessment is issued under paragraph 9, Schedule 16, if earlier. Therefore, an employer will not be subject to an income tax charge under paragraph 8, Schedule 16, as a consequence of an underpayment of furlough pay to employees by reason of error or mistake, if it makes good any shortfall to their employees in that period.
What records must I retain, and for how long?
You must keep a copy of all relevant records for 6 years, including:
  • the amount claimed and claim period for each employee
  • the claim reference number for your records
  • your calculations in case HMRC need more information about your claim
We have asked HMRC to confirm if any further records need to be retained.
Can I make a deduction from my employee’s salary if they are on furlough.
There are very strict rules around what can be deducted from an employee’s salary when they are on furlough. See GOV.UK. However, employee authorised salary deductions can now be made from grant payments, such as if the employee’s furlough pay has previously been calculated incorrectly and the employee has agreed to refund the overpayment to the employer.
Are there any restrictions on the second phase (July to October) of the scheme?
Yes, these include:
  • Only employers who have furloughed employees for a full three week period prior to 30 June will be able to make a claim under the second phase. Claims for this first phase must be made by 31 July.
  • Only employees who have been previously furloughed on or before 10 June will be covered by the second phase of the scheme.
  • Employers will need to provide details of hours usually and actually worked when making a claim under the scheme.
  • The number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any previous claim under the current CJRS.
Claim periods cannot overlap a calendar month. If a pay period spans the month end then two claims have to be made in relation to that pay period.
Claims for periods up to and including 31 October must be made by 30 November 2020.
Are there any restrictions on the third phase (November onwards) of the scheme? 
No, employees do not need to have been furloughed under the CJRS previously.
For employees that meet the eligibility criteria, and were previously furloughed, employers must use the same calculations for calculating reference pay and usual hours as CJRS.
For an employee who meets the criteria of the extended scheme but was not previously eligible for CJRS, the alternative calculations of reference pay and usual hours must be used.
For all other employees, employers must use the CJRS calculations for calculating reference pay and usual hours.
Can I still make a claim even if I may have to make employees redundant?
Yes. We have confirmed with HMRC that whilst the Treasury Direction states that amounts paid under the scheme ‘are used by the employer to continue the employment of employees in respect of whom the CJRS claim is made’, employers can put employees on furlough, and make a CJRS claim, even if it is possible (likely even) that the person might in fact be made redundant at some point in the future.
What do I do if I do not hold every employee’s National Insurance Number, or if I have employees with a temporary National Insurance Number?
HMRC has provided us with specific guidance in relation to these circumstances.
Can agents make claims on behalf of their clients?
Agents that are authorised to act on behalf of clients for PAYE matters, will be able to claim. However, file only agents, including Payroll Bureaus, will not be able access the service due to data protection reasons. See HMRC letter to agents
How long will it take for claims to be paid?
It will take around six working days for claims to be paid. 
The claim process requires a Corporation Tax Unique Taxpayer Reference, Self-Assessment Unique Taxpayer Reference or Company Registration Number. What do I input if I don’t have these?
Answer ‘no’ to the following questions:
  • Does the employer submit a company tax return (No)
  • Is the employer registered for self-assessment (No)
  • Is the employer registered at companies house (No)
Then when asked:
What is the name of the employer?
Enter the name of the organisation or individual employer.
If problems persist please let us know at technical [at]
What about annually paid directors and other employees who are paid in March each year.
In order to qualify for the CJRS a director or employee must have been notified to HMRC on a real-time information (RTI) submission on or before 19 March 2020, AND which relates to a payment of earnings in the 2019/20 tax year. If the last RTI submission before 19 March 2020 was in relation to the 2018/19 tax year then the individual will not qualify. See ‘Company directors with an annual pay period’ on GOV.UK.
How to manage furloughed employees when they are called for jury service?
Where a furloughed employee is called up for jury service, if it is the employer’s policy is to pay the employee, they can continue to claim under CJRS. Any top up above 80%/70%/60% (depending on what month it is) will need to be funded by the employer. If the employer’s policy is not to pay the employee during jury service then there is no CJRS claim to be made and the employee claims for loss of earnings from HM Courts & Tribunal Services/Crown Prosecution Service.
Do deferred or conditional pay agreements in furlough agreements or variations to contracts, whereby the employees will not receive any pay unless or until the CJRS grant has been received from HMRC, imperil claims under the CJRS?
HMRC and BEIS have confirmed that the CJRS claim will not be affected and that there is no employment law obstacle to such agreements.
Do claims under the CJRS fall within the Senior Accounting Officer (SAO) regime?
Yes. HMRC has confirmed that CJRS claims DO fall under the SAO regime.
Where is the list of employer names that HMRC said it would publish?
The list of employers who made a CJRS claim in relation to December 2020 can be found here
For February 2021 how do I calculate 80% of the wages for monthly variable pay employees from the same period in the previous year? 
HMRC has confirmed that it will accept that February 2021 claims for employees with variable pay and a monthly payroll may be based on either the full amount earned in February 2020 or 28/29ths of that amount (to reflect the leap year). HMRC will not challenge either approach.