Coronavirus: Furlough leave and the Coronavirus Job Retention Scheme

Peak District sheep farming_64146

On 26 March 2020 HMRC first published guidance on the new Coronavirus Job Retention Scheme (CJRS). Since then more guidance has been issued and Treasury Directions on 15 April 2020, 22 May 2020 and 25 June 2020 have given legal effect to the CJRS. Please refer back to this Q&A for any further updates.

Updated 17 September 2020

Click on the question links below for advice:

What is the Coronavirus Job Retention Scheme?

The government has announced a new temporary Coronavirus Job Retention Scheme (CJRS) where employers can agree with their employees to change their work status to a furloughed worker and the government will provide financial support for employers who do this. The CJRS is designed to help employers whose operations have been severely affected by coronavirus to retain their employees and protect the UK economy. The government recognises different businesses will face different impacts from coronavirus and therefore all employers are eligible to claim under the scheme. Furlough is a new concept in UK employment law but it means the employee is on a period of leave. Initially the scheme was expected to last for three months starting from 1 March 2020 but it has now been extended until the end of June 2020. On 12 May 2020 the Chancellor announced a further final extension until 31 October 2020, but with changes to the scheme to allow for flexible furloughing from 1 July and changes from 1 August 2020 so that employers will be expected to contribute to the furloughed employees’ wages (still subject to 80% of their normal wages, capped at £2,500 per month). For more information on what changes are coming in, please see: How will the CJRS be changing from 1 July 2020 onwards?

The online portal for making CJRS claims went live on 20 April 2020. Unless there is an express lay off clause within the contract your employee would need to agree to change their status which must be documented in writing with detail of how this impacts the rest of their contractual entitlements.

Employers can find more information from HMRC on the Government website.

Check if you can use the scheme

Check if you can claim for your employees' wages through the Coronavirus Job Retention Scheme

Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme

Work out what you can claim

Steps to take before calculating your claim using the Coronavirus Job Retention Scheme

Calculate how much you can claim using the Coronavirus Job Retention Scheme

Find examples to help you calculate your employees' wages

Claim and report earnings

Claim for wages through the Coronavirus Job Retention Scheme

Reporting employees' wages to HMRC when you've claimed through the Coronavirus Job Retention Scheme

Return to menu

Click here to use the NFU's COVID-19 business impact service.

By using this form, farmers and growers can provide information on any business-critical issues they have encountered, or expect to encounter, arising from the COVID-19 outbreak. The NFU will log this information and use it in an anonymised format to flag the key issues agriculture and horticulture are facing to government on a daily basis. However, no personal data will be shared with the government. The service is for all farmers and growers across the UK.


How will the CJRS be changing from 1 July 2020 onwards?

Flexible furloughing:

From 1 July, employers can bring back to work employees that have previously been furloughed for any amount of time and on any shift pattern, while still being able to claim CJRS grant for their normal hours not worked. This is one month earlier than was originally announced.

When claiming the CJRS grant for furloughed hours; employers will need to report and claim for a minimum period of seven calendar days, although the flexible furlough can last for any period of time.

To be eligible for the grant, employers must agree with their employee any new flexible furloughing arrangement and confirm that agreement in writing. Please see our template letter for arranging flexible furlough.

Employers can claim the grant for the hours their employees are not working calculated by reference to their usual hours worked in a claim period. See How do I calculate what are the usual hours for flexibly furloughed employees? for more detail on how to establish what an employee’s usual hours are.

Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period. For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts.

The cap on the furlough grant will be proportional to the hours not worked.

Closure to new entrants from 30 June:

The scheme closed to new entrants from 30 June, unless they are returning from statutory parental leave or they are a returning military reservist. For more information on this, please see Can I still furlough an employee who has returned from maternity, shared parental, adoption, paternity or parental bereavement leave (statutory parental leave) after 10 June? or Can I still furlough an employee who is a returning military reservist?

Employers will now only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June. This means that the final date by which an employer can furlough an employee for the first time was 10 June, in order for the current three-week furlough period to be completed by 30 June. Employers had until 31 July to make any claims in respect of the period to 30 June.

From 1 July, the scheme is only available to employers that have previously used the scheme in respect of employees they have previously furloughed and the maximum number of employees that employers will be able to claim for is limited to the number of employees claimed for in any claim period up until 30 June 2020.

From 1 July, claim periods can no longer overlap months. Employers who previously submitted claims with periods that overlapped calendar months will not be able to do this going forward. This is necessary to reflect the changes to the scheme.

Employers can continue to make claims in anticipation of an imminent payroll run, at the point payroll is run or after payroll has been run.

Employers can make their first claim under the new scheme from 1 July.

Employer costs:

From August 2020, the level of the grant will be slowly tapered to reflect that people will be returning to work.

In June and July, employers will be able to continue to claim 80% of wages, including employer NICs and pension contributions, for any time the employee is furloughed but if the employee undertakes any work, employers will have to pay them for the hours worked.

In August, the government will continue to pay 80% of wages up to a cap of £2,500, but employers will have to pay employer NICs and pension contributions for the hours the employee does not work, plus the wages and costs for any hours the employee has worked.

In September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will pay employer NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500, plus the wages and costs for any hours the employee has worked.

In October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will pay employer NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500, plus the wages and costs for any hours the employee has worked.

The cap will be proportional to the hours not worked.

Return to menu


What is flexible furlough?

For claim periods starting after 1 July, employers can bring furloughed employees back to work for any amount of time and any shift pattern, while still being able to claim Coronavirus Job Retention Scheme grant for the hours not worked. This only applies where an employer has previously submitted a claim for the employee in relation to a furlough period of at least three consecutive weeks taking place any time between 1 March 2020 and 30 June 2020.

Return to menu


Who can claim?

Any UK business that has employees enrolled on PAYE online on 19 March 2020. A UK bank account which accepts BACS payments will be needed. This relevant date has been changed by the guidance issued on 15 April, as previously the relevant date was 28 February 2020.

Businesses will only be able to claim for employees who have been furloughed for a minimum three-continuous-week period between 1 March 2020 and 30 June 2020.

The scheme is not designed to be used by the public sector and if any employers are continuing to receive public funding for staff costs they are expected to use that funding as usual and not claim through the CJRS. Organisations who are receiving public funding specifically to provide services necessary to respond to coronavirus are not expected to furlough staff.

Return to menu


Can I furlough all of my employees?

All employees on your payroll on 19 March 2020 and who you made an RTI submission notifying payment in respect of that employee to HMRC on or before 19 March 2020 and on any type of employment contract can be furloughed, subject to the correct procedure being followed. This will include those employed on full time, part time, fixed term, apprenticeship, zero hours or flexible contracts. Foreign nationals employed by you are included in the scheme and it has been confirmed that grants under the scheme are not classed as ‘access to public funds’.

10 June 2020 was the last date for furloughing a new employee that you can then submit a CJRS claim for. The scheme closed to new entrants from 30 June, which means that the final date by which an employer can furlough an employee for the first time was 10 June, in order for the current three-week furlough period to be completed by 30 June, unless the employee is returning from statutory parental leave or is a returning military reservist. For more information on this, please see Can I still furlough an employee who has returned from maternity, shared parental, adoption, paternity or parental bereavement leave (statutory parental leave) after 10 June? or Can I still furlough an employee who is a returning military reservist?

CJRS grants are not classed as state aid.

From 1 July employers are limited to the number of employees’ wages that they can claim for. This must not exceed the maximum number of employees claimed for in any period ending by 30 June 2020. For example, an employer had previously submitted three claims between 1 March 2020 and 30 June, in which the total number employees furloughed in each respective claim was 30, 20 and 50 employees. Then the maximum number of employees that employer could furlough in any single claim starting on or after 1 July would be 50.

There are exceptions to this rule for claiming for employees who are returning to work from statutory parental leave or who are a returning military reservist from 1 July. For more information on this please see Can I still furlough an employee who has returned from maternity, shared parental, adoption, paternity or parental bereavement leave (statutory parental leave) after 10 June? or Can I still furlough an employee who is a returning military reservist?

Fixed term contracts can be extended or renewed during a furlough period. There is no minimum period which must be left to run on a fixed term contract to enable it to be renewed or extended. The furlough period must be for a minimum period of three consecutive weeks. An employee on a fixed term contract could be re-employed, furloughed for a minimum three-continuous-week period starting on or before 10 June 2020 and claimed for if either:

  • their contract expired on or after 28 February 2020 and an RTI payment submission for the employee was notified to HMRC on or before 28 February 2020;
  • their contract expired on or after 19 March 2020 and an RTI payment submission for the employee was notified to HMRC on or before 19 March 2020.

If the employee’s fixed term contract has not already expired, it can be extended, or renewed. Employers can claim for them if an RTI payment submission for the employee was notified to HMRC on or before 19 March 2020. In all cases (unless returning from statutory parental leave) the employee must have been furloughed for a minimum three-consecutive-week period by 30 June 2020.

Employees that started and ended the same contract between 28 February 2020 and 19 March 2020 will not qualify for this scheme. This is not specific to employees on fixed-term contracts, the same would apply to employees on all other contracts.

If you use any agency workers employed by an agency, they will be the employer responsible for making any decision about to furlough them or not.

Any employee who has been hired since 19 March 2020 cannot be furloughed and you will not be able to claim for them.

You do not need to furlough all of your employees, you can choose whether you furlough any of them and if you do, you can choose who to furlough where you believe it to be appropriate to do so.

HMRC have issued the following summary:

Was the employee employed with you as of this date?Date RTI submission notifying payment was made to HMRCEligible for CJRS?
28 February 2020On or before 28 February 2020Yes
28 February 2020On or before 19 March 2020Yes
28 February 2020On or after 20 March 2020No
19 March 2020On or before 19 March 2020Yes
19 March 2020On or after 20 March 2020No
On or after 20 March 2020On or after 20 March 2020No

Return to menu


Will I be eligible for the Job Retention Bonus?

On 8 July 2020, the Chancellor announced the introduction of the Job Retention Bonus as part of his ‘Plans for Jobs’.

This is a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31‌‌‌ ‌January 2021.

To be eligible, employees will need to:

  • earn at least £520 per month (above the Lower Earnings Limit) on average for November 2020, December 2020 and January 2021
  • have been furloughed by you at any point and legitimately claimed for under the Coronavirus Job Retention Scheme
  • have been continuously employed by you up until at least 31‌‌‌ ‌January 2021.

Employers will be able to claim the bonus from February 2021 once accurate RTI data to 31‌‌‌ ‌January has been received. Click here for more information about this scheme. Full guidance will be published by the end of September.

Return to menu


Can I claim from the CJRS for wages paid to a furloughed employee during their notice period?

You can continue to claim for the furloughed hours of an employee who is serving their notice period, however grants cannot be used to substitute redundancy payments. HMRC has said it will continue to monitor businesses after the scheme has closed.

Where an employee is flexibly furloughed, they will be entitled to receive full pay for their working hours and this cost will be met entirely by the employer. Any claim made from the CJRS for the furloughed hours in a notice period will be subject to the CJRS rules on limits and employer contributions. The reason for termination of employment does not need to be for redundancy in order to claim from the CJRS but the employee must have been genuinely and legitimately furloughed.

New legislation was introduced from 31 July 2020 requiring employers to ensure that furloughed employees who receive statutory notice payments have those sums calculated on the basis of their full, normal rate of pay rather than any reduced rate they may have been receiving while on furlough under the CJRS.

Employers will still be able to claim for the relevant percentage of the notice pay from the CJRS but will be liable to top up the notice payment to full pay. The legislation also applies to furloughed employees who receive statutory redundancy payments, however, as stated above, the CJRS will not fund any part of redundancy payments.

If you are considering paying a furloughed employee in lieu of their notice period, please contact CallFirst for further information.

Return to menu


What if I have already made some or all of my employees redundant?

If any of them were made redundant on or after 28 February 2020 you may rehire them and then with their agreement place them on furlough leave at any time on or before 10 June 2020, so long as they were on your payroll at 28 February 2020 and you had made an RTI submission notifying HMRC of payment to that employee on or before 28 February 2020. You will be able to claim through the CJRS from the date they were furloughed.

If you made employees redundant after 19 March 2020, you may rehire them, and then with their agreement place them on furlough on or before 10 June 2020 and claim for their wages through the scheme from the date on which you furloughed them so long as you had made an RTI submission notifying HMRC of payment to that employee on or before 19 March 2020.

You will need to consider what will happen to their employment at the end of their furlough leave and if necessary, make arrangements for the recovery of any payment in lieu of notice, holiday payments and redundancy payments. At the end of the furlough period if there is still a need to make these employees redundant you should take further advice from CallFirst.

Return to menu


What if an employee left my employment and has asked to come back and be furloughed?

It was possible to reinstate an employee who has left and place them on furlough on or before 10 June 2020 in accordance with the scheme rules so long as they were on your payroll as of 28 February 2020 and you had made an RTI submission notifying HMRC of payment to that employee on or before 28 February 2020. If they stopped working for you on or after 19 March 2020 and they were employed by you on 19 March 2020 and you had made an RTI submission notifying HMRC of payment to that employee on or before 19 March 2020, you will also be able to reinstate and furlough these employees on or before 10 June 2020. If you agree to reinstate them you will be able to claim through the CJRS from the date they were furloughed. When an ex-employee asks for this there is no obligation on an employer to agree to the request.

If you chose to agree you will need to consider what will happen to the employment at the end of the furlough as the employee will remain employed by you unless anything to the contrary has been agreed. This will mean if your employee has at least 2 years continuous length of service at the end of the furlough leave period, that you will need to show that you have a fair reason to terminate employment and have followed a fair procedure in doing so.  You should take advice from CallFirst prior to terminating employment.

Return to menu


Can my employees carry out any work for me during this time, including training or volunteering elsewhere?

During furlough leave, up until 30 June 2020, an employee could not carry out any work for you, including any work at home.

From 1 July 2020 (one month earlier than originally announced) it is possible to bring back furloughed employees on a part-time basis. Employers will be liable to pay their employees for any work undertaken, while still claiming through the CJRS for the proportion of the normal hours not worked.

During the furloughed hours an employee should not carry out any work for you, including any work at home, even if it’s just checking work related emails, however you will still be able to use email as a means of keeping in touch with them. You cannot ask your employee to do any work during their furloughed hours that:

  • makes money for your business or any organisation linked or associated with your business;
  • provides services for your business or any organisation linked or associated with your business.

It is possible for furloughed employees to volunteer for another employer or organisation, or complete training for their employer during their furloughed hours as long as they do not provide services to or generate revenue for, or on behalf of your organisation or an organisation linked to or associated with your organisation. You cannot furlough your employee and then ask, or expect, them to volunteer for you in the same or a different role.

If your employee is required to complete any training, such as online training courses, during their furloughed hours, then they must be paid at least national minimum wage (NMW) for the time spent training, even if this is more than the 80% of their wage that will be subsidised. Government guidance states employees should be encouraged to undertake training but it’s not compulsory and will be for individual employers to decide if this is appropriate.

If you have furloughed an apprentice their training may continue throughout the period of furlough, subject to NMW requirements mentioned above.

Return to menu


Can my furloughed employee work elsewhere while furloughed?

If your employee has an existing second job they may still work for their other employer whilst furloughed by you, subject to any prohibitions in their contract with you or any conditions you make the offer of furlough leave subject to. If they are furloughed by their second employer it will be classed as two separate furloughs which are not linked to each other in any way.

It is clear from the government guidance that up until 30 June 2020, furloughed employees could not work for you whilst they are furloughed, but it has been confirmed that it is possible for furloughed workers to start work whilst on furlough leave for a new employer not linked or associated to your business. Some employment contracts may have a restriction on working for a second employer. Where there is such a restriction in the contract it is possible for an employer to choose to waive the clause. This will be the choice of the employer but furloughed workers are being encouraged to help fill in the gaps of workforces in certain industries such as the care sector, farming and food production, therefore employers with these types of restrictions in their contracts may want to allow their employees to help where they are able to.

Where furloughed employees are taking up further employment during a period of furlough, they should be made aware they are expected to return to their original work when the period of furlough ends and may not be able to continue working in the new second role.

If you are flexibly furloughing an employee and they have a second job with another employer, you may allow them to continue with that job, provided that it does not prevent them from being able to work for you during their working hours. If they took up their second job whilst they were on furlough from the business and it prevents them from being able to work for you during their working hours, you will need to make sure that the employee has either changed their working hours in that job, or resigned from it.

Return to menu


What do I need to do if I take on a new starter who is being furloughed by their current employer?

If you take on a new employee, you will need to complete the starter checklist form correctly, available here. If the employee is furloughed from another employment, they should complete Statement C.

Return to menu


How do I furlough an employee?

Once you have either agreed to change the employee’s status to furlough worker or have established that you have the express contractual right to make such a change, you must write to your employee confirming the arrangements, including when it will take affect from and what contractual rights may or may not apply during the furlough leave period. Please see our online template letter to send to your employees. If you need to re-furlough any employees who have previously been furloughed, it is advisable that you use the latest version of the letter available on our website at every time of furlough. It is best practice, although not essential, to ask the employee to sign a copy of the letter and return it to you. ACAS has template letters you can use if you need to extend a period of furlough.

If you are changing the furlough agreement to a flexible furlough arrangement you will need to have and keep records of new, up-to-date written confirmation of this. Please see our template letter for arranging flexible furlough.

HMRC’s guidance asks employers to keep their employees informed, answering any questions that they might have and to ask their employees not to contact HMRC as they will be unable to provide employees with details of claims made by their employer.

The NFU has produced a furlough leave template for members to use. Download it here. 

This template is accessible to NFU members only and you will be asked to log in.

How to log in: Use your membership number or the email address associated with your membership to log in. If you've forgotten your password, you can click here to reset it or contact NFU CallFirst on 0370 845 8458.

Return to menu


Do I need to keep any records?

Employers must confirm in writing than an employee has been furloughed and ensure that a record of this is kept for five years from the date of furlough (until at least 30 June 2025). Records of any change to the furlough arrangement, including flexible furlough, will also need to be kept.

Usual payroll records must also be kept for six years. Your records must show:

  • the amount claimed and claim period for each employee;
  • the claim reference number;
  • your calculations in case HMRC need any further information;
  • for flexible furloughed employees: the usual hours they work and the actual hours worked.

If you need to re-furlough an employee this must be confirmed in writing again. ACAS has template letters you can use if you need to extend a period of furlough. 

Return to menu


What do I do if my employee doesn’t agree to be furloughed?

Employees cannot be forced onto furlough leave unless there is an express applicable lay off clause in their contract or you follow the correct change of contract procedures. Where there is no such clause and the employee refuses to agree to a period of furlough leave you should consider if they are going to be at risk of redundancy or termination of employment. Please contact CallFirst for further advice before taking any further action.

Return to menu


How long can furlough be for?

Pre 1 July:

A furlough period must be for a minimum period of three consecutive weeks. There is no limit on the number of times an employee may be furloughed during the time the CJRS is live, but each period of furlough must be for the minimum three consecutive weeks period. It is therefore possible to have a rota system for employees where there may not be enough work for all them – see What should I do if I have enough work for some but not all my employees and would still like to make use of the CJRS? Where a rota system or similar is in place please remember to still follow the guidance on ensuring a safe working environment – See our Coronavirus Q&A and our COVID-19 Secure Q&A for further guidance on this.

Each period of furlough can be extended by any amount of time while the employee is on furlough, but if the furlough period ends and is then restarted it will need to be for the minimum of three consecutive weeks in order to claim for the later period of furlough. However, 30 June 2020 is the last day you can claim for through this scheme.

If an employee has had a minimum three-week period of furlough and then starts another period on any day between 11 June and 30 June, this subsequent period will still need to be for a minimum of three weeks.

ACAS has template letters you can use if you need to extend, or end, a period of furlough.

From 1 July:

There is no minimum period of furlough or limit on the number of times of furlough for employees from 1 July, but they must have been previously furloughed for three consecutive weeks anytime between 1 March 2020 and 30 June 2020.

Return to menu


What should I do if I have enough work for some but not all my employees and would still like to make use of the CJRS?

It would be advisable to adopt a selection process similar to that in a redundancy situation but also giving priority where appropriate to vulnerable groups, as any selection made must be fair. This may appear to some to be discriminatory but it can be defended as a reasonable adjustment for disabled employees who are deemed to be vulnerable and a reasonable and proportionate means of achieving a legitimate business aim for others. Other employees may feel disgruntled by this but you should explain to them the circumstances that you are in. Some employers may be willing to offer some sort of reward or benefit to those employees who continue working whilst others are on furlough leave but this of course is not compulsory and entirely at the discretion of the employer.

Return to menu


Can I still furlough an employee who has returned from maternity, shared parental, adoption, paternity or parental bereavement leave (statutory parental leave) after 10 June?

You can furlough an employee returning from statutory parental leave after 10 June even if you are furloughing them for the first time. You may do this provided that:

  • you have previously submitted a claim for any other employee in your organisation in relation to a furlough period of at least three consecutive weeks taking place any time between 1 March 2020 and 30 June;
  • the employee you wish to furlough for the first time started maternity, shared parental, adoption, paternity and parental bereavement leave before 10 June and has returned from that leave after 10 June;
  • the employee was on your PAYE payroll on or before 19 March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19 March 2020.

Where the employee starts a furlough period before 1 July this furlough period must be for a minimum of three consecutive weeks. This is the case regardless of whether the three consecutive week minimum period ends before or after 1 July.

When calculating the maximum number of employees you can claim for, the number of employees you are furloughing for the first time due to them returning from parental leave should be added to any previous maximum. 

Return to menu


Can I still furlough an employee who is a returning military reservist?

You can furlough an employee who is a military reservist returning to work after a period of mobilisation after 10 June, even if you are furloughing them for the first time.

You may do this provided that:

  • you have previously submitted a claim for another employee in your organisation for a furlough period of at least three consecutive weeks, taking place anytime between 1 March 2020 and 30 June;
  • the employee was away on a period of mobilisation that started before 10 June and returned from that mobilisation after 10 June;
  • the employee was on your PAYE payroll and you submitted an RTI submission for them on or before 19 March 2020.

Where the employee starts a furlough period before 1 July this furlough period must be for a minimum of three consecutive weeks. This is the case regardless of whether the three consecutive week minimum period ends before or after 1 July.

When calculating the maximum number of employees you can claim for, the number of employees you are furloughing for the first time who are military reservists should be added to any previous maximum.

Return to menu


What will I need to pay my employees?

That will depend on what you have agreed with them as part of the terms of the furlough leave. During furlough, the employee should be paid at least 80% of their normal wage for the time that they are not working. When an employee is on flexible furlough from 1 July 2020, they will need to be paid their usual wage for the time spent working and 80% of their wage for the time they are furloughed.

Up until 31 July, the CJRS will reimburse 80% of the usual monthly wage cost up to a maximum of £2,500 per month plus the associated Employer National Insurance contributions and minimum automatic auto enrolment pension contributions on that wage. Fees, non-discretionary commissions and past overtime payments that you are obliged to pay are included in the CJRS, however discretionary commissions, tips, bonuses, non-cash payments and benefits in kind such as the costs of a company car or gym membership are excluded. On 14 May further guidance was published on what non-discretionary payments would include:

  • When you’re working out if a payment is non-discretionary, only include payments which you have a contractual obligation to pay and to which your employee had an enforceable right.
  • When variable payments are specified in a contract and those payments are always made, then those payments may become non-discretionary. If that is the case, they should be included when calculating 80% of your employees’ wages.
  • If your employee has been paid variable payments due to working overtime, you can include these payments when calculating 80% of their wages as long as the overtime payments were non-discretionary.
  • Payments for overtime worked are non-discretionary when you are contractually obliged to pay the employee at a set and defined rate for the overtime that they have worked.

The employee’s furlough wage will be subject to the usual tax and other deductions including the employee’s automatic enrolment pension contributions unless they have opted out.

From 1 August 2020, the level of the grant will be slowly tapered to reflect that people will be returning to work.

From 1 August, the government will continue to pay 80% of wages up to a cap of £2,500, but employers will have to pay employer NICs and pension contributions for the hours the employee does not work, plus the wages and costs for any hours the employee has worked.

From 1 September, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work. Employers will pay employer NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500, plus the wages and costs for any hours the employee has worked.

From 1 October, the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work. Employers will pay employer NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500, plus the wages and costs for any hours the employee has worked.

The cap will be proportional to the hours not worked.

Return to menu


How do I calculate what the maximum amount I can claim from the CJRS?

The maximum wage amount you can claim is £2,500 a month, or £576.92 a week, plus any National Insurance and pension contributions you can claim for.

This limit on what you can claim will reduce in September and October but you will still need to ensure that any furloughed employee receives 80% of their wage, capped at £2,500 a month, or £576.92 a week for the time that they are furloughed. If they are flexibly furloughed at any time, the cap is adjusted pro rata.  

If the length of time you’re claiming for is not one week or one month, you’ll need to use the daily maximum wage amounts to work out the maximum amount you can claim for each employee.

To work out the maximum amount you can claim, multiply the daily maximum wage amount by the number of days your employee is furloughed for in your claim.

MonthDaily maximum wage amount
March 2020£80.65 per day
April 2020£83.34 per day
May 2020

June 2020


July 2020


August 2020


September 2020


October 2020

£80.65 per day


£83.34 per day


£80.65 per day


£80.65 per day


£83.34 per day*


£80.65 per day*

*In September and October, this is the maximum amount you will have to pay a furloughed employee. The amount that you can claim for will be lower.

If your employee is furloughed over two calendar months, you will need to calculate the maximum amount for each calendar month and add them together. This will only apply for claim periods ending on or before 30 June, as periods from 1 July cannot cover more than one calendar month.

If you’re claiming for multiple pay periods in one claim, you can calculate the total maximum using a mixture of:

  • the daily maximum wage amount
  • the weekly maximum wage amount
  • the monthly maximum wage amount

For periods ending on or before 31 August 2020 you can claim a grant for the full amount of the minimum furlough pay.

For periods starting on or after 1 September you will need to calculate the grant amount as follows:

  1. Start with the amount of minimum furlough pay.
  2. Divide by 80.
  3. Depending on which month you’re claiming for, multiply by:
  • 70 for September
  • 60 for October

Return to menu


How do I calculate 80% of my employee's usual wage?

To calculate 80% of your employee’s usual wage HMRC have developed formulas employers can use and an online calculator. However, the calculator does not cover all scenarios and HMRC are clear that it is the employer’s responsibility to check that the amount being claimed is correct. There is a webpage with worked examples of all of the different formulas. The way to work out 80% of an employee’s usual wages is different depending on the way they are paid.

HMRC advise employers to use the calculation they think best fits the way their employee is paid. 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 of approach is made.

Where a claim covers multiple pay periods, this calculation should be done for each and then added together.

Full and part time salaried employees

For full time and part time salaried employees, the employee’s actual salary, as in their last pay period prior to 19 March 2020, should be used to calculate the 80%. If, based on previous guidance, you have calculated your claim based on the employee’s salary as at 28 February 2020 (and this differs from their salary in their last pay period prior to 19 March 2020) you can choose to still use this calculation for your first claim.

To work out 80% of your employee’s wage:

  1. Start with your employee’s wages, which is their last pay period on or before 19 March - if you’re claiming for a full pay period, skip to step 4.
  2. Divide by the total number of days in the pay period.
  3. Multiply by the number of furlough days in the pay period.
  4. Multiply by 80%.

If your employee has not been paid for a full pay period up to 19 March 2020, you’ll need to work out what their usual wages are and then calculate 80%. To do this:

  1. Start with amount payable to them in their last pay period on or before 19 March.
  2. Divide by the number of days in their last pay period (including non-working days).
  3. Multiply by the number of days that would have been in that pay period.
  4. Divide by the total number of days in this pay period.
  5. Multiply by the number of furlough days in this pay period.
  6. Multiply by 80%.

Employees with variable pay

If the employee’s pay varies and they started their employment after 6 April 2019 you should use their average monthly wage since they started until the date they are furloughed.

To work out 80% of your employee’s average monthly earnings:

  1. Start with the amount they earned in the tax year up to the day before they were furloughed.
  2. Divide it by the number of days they’ve been employed since the start of the tax year – including non-working days (up to the day before they were furloughed or 5 April 2020 – whichever is earlier).
  3. Multiply by the number of furlough days in this pay period.
  4. Multiply by 80%.

Every day or period after the employee commenced employment with the employer is counted in making this calculation. This includes days when no work was undertaken.

If the employee has been employed continuously from the start of the 2019 to 2020 tax year, you can claim the highest of either:

  • 80% of the same month’s wages from the previous year (up to a maximum of £2,500 a month)
  • 80% of the average monthly wages for the 2019 to 2020 tax year (up to a maximum of £2,500 a month)

To calculate 80% of the same month’s wages from the previous year:

  1. Start with the amount payable to them in the same period last year.
  2. Divide by the total number of days in this pay period - including non-working days.
  3. Multiply by the number of furlough days in this pay period.
  4. Multiply by 80%.

To calculate 80% of the average monthly wages for the last tax year:

  1. Start with the amount payable to them in the tax year up to the day before they were furloughed.
  2. Divide it by the number of days from the start of the tax year - including non-working days (up to the day before they were furloughed, or 5 April 2020 – whichever is earlier).
  3. Multiply by the number of furlough days in this pay period.
  4. Multiply by 80%.

If your employee was paid a statutory payment in the claim period, you must subtract the amount which is paid to the employee for the claim period from the amount you claim under the scheme, if your employee is paid:

  • Statutory Maternity Pay
  • Statutory Adoption Pay
  • Statutory Paternity Pay
  • Statutory Shared Parental Pay
  • Statutory Parental Bereavement Pay

Your employee cannot be furloughed while they receive statutory sick pay and your employee cannot receive statutory sick pay while they are furloughed.

You will need to pay the full grant received to the employee, you are not permitted to make any fee deductions from it or to use it towards the costs of any other benefits still being provided to the employee. If your employee has authorised you to make deductions from their salary, these deductions can continue while the employee is furloughed provided that these deductions are not administration charges, fees or other costs in connection with the employment. If your business is insolvent, the payment claimed must still be paid to the employee. If it is not then you will be liable to repay it to HMRC.

Return to menu


How do I calculate what are the usual hours for flexibly furloughed employees?

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.

You can calculate the usual hours for the entire claim period or for each pay period, or part of a pay period, that falls within that claim period. HMRC guidance assumes that you will calculate on a pay period basis but states that either method is acceptable.

If you calculate the usual hours for the entire claim period and the result is not a whole number, you should round it up to the next whole number. If you calculate the usual hours on a pay period basis you should round the result up or down to the nearest whole number.

There are two different calculations you can use to work out your employee’s usual hours, depending on whether they work fixed or variable hours.

HMRC has a webpage with worked examples employers can use and an online calculator. However, the calculator does not cover all scenarios and HMRC are clear that it is the employer’s responsibility to check that the amount being claimed is correct. 

Flexible furloughed employees with fixed hours and whose pay does not vary according to the number of hours they work:

You need to calculate the usual hours for each pay period, or part of a pay period, that falls within the claim period. This is done by:

  • Start with the hours your employee was contracted for at the end of the last pay period ending on or before 19 March 2020.
  • 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) you are claiming for.
  • Round up or down to the next whole number if the outcome is not a whole number.

If an employee with fixed hours was on annual leave, off work sick or on family related statutory leave at any time during the last pay period ending on or before 19 March, the usual hours should be calculated as if the employee had not taken that leave. The employee’s working pattern does not have to match their pay period (for example, an employee could be contracted to 40 hours a week but be paid monthly).

Flexible furloughed employees with variable hours or are paid per task or piece of work done:

You should calculate the usual hours for employees who work variable hours, if either:

  • your employee is not contracted to a fixed number of hours;
  • your employee’s pay depends on the number of hours they work.

The ‘usual hours’ in this case will be calculated based on the higher of either:

  • the average number of hours worked in the tax year 2019 to 2020;
  • the corresponding calendar period in the tax year 2019 to 2020.

You need to calculate the usual hours for each pay period, or part of a pay period, that falls within the claim period.

When you calculate the usual hours, you should include:

  • any hours of leave for which the employee was paid their full contracted rate (such as annual leave);
  • any hours worked as ‘overtime’, but only if the pay for those hours was not discretionary.

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:

  • Start with the number of hours worked (including paid leave) in the tax year 2019 to 2020 before the employee was furloughed, or the end of the tax year if earlier.
  • Divide by the number of calendar days the employee was employed by you in the tax year 2019 to 2020, up until the day before they were furloughed, or the end of the tax year if earlier. Don’t count any calendar days where the employee was on a period of:
  1. statutory sick pay related leave
  2. family related statutory leave
  3. reduced rate paid leave following a period of statutory sick pay related leave
  4. reduced rate paid leave following a period of family related statutory leave
  • Multiply by the number of calendar days in the pay period (or partial pay period) you are claiming for.
  • Round up or down to the next whole number if the outcome is not a whole number.

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:

  • Identify the pay periods in the 2019 to 2020 tax year that correspond to at least one calendar day in the pay period (or partial pay period) you are claiming for.
  • If the pay period (or partial pay period) you are claiming for starts and ends on the same calendar days as the identified pay period in the 2019 to 2020 tax year - use the number of hours they worked in that pay period.
  • If the pay period (or partial pay period) you are claiming for does not start and end on the same calendar days as the identified pay periods in the 2019 to 2020 tax year – you’ll need to add together a proportion of the hours worked in each of the pay periods you’ve identified.

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:

  • Start with the number of hours worked in the first pay period identified in the tax year 2019 to 2020.
  • Multiply by the number of calendar days in that pay period which correspond to at least one calendar day in the pay period (or partial pay period) you are claiming for.
  • Divide by the total number of calendar days in the pay period in the tax year 2019 to 2020.
  • Repeat the above three steps for each subsequent identified pay period in the tax year 2019 to 2020.
  • Add them all together.
  • Round up or down to the next whole number if the outcome is not a whole number.

Calculating the number of working and furloughed hours for each employee

You will have agreed how many hours your flexibly furloughed employee is going to work in the claim period. They will be furloughed for the rest of their usual hours.

To calculate the number of furloughed hours:

  • Start with your employee’s usual hours.
  • Subtract the number of hours they actually worked in the claim period – even if this is different to what you agreed.

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.

If your employee stops being furloughed or flexibly furloughed partway through a claim period, when calculating the number of furloughed hours you can claim for, make sure you:

  • only calculate the employee’s usual hours up to the last day of furlough, instead of to the end of the claim period
  • do not include any working hours after the last day of furlough

This applies even if your claim period includes days after the employee’s last day of furlough (for example, because you’re claiming for multiple employees and some of them stay on furlough).

You do not need to amend any previous claims submitted prior to 14 September 2020 for these employees. You should use this calculation for any claims from 14 September 2020, for an employee who stops being furloughed or flexibly furloughed partway through a claim period.

You cannot claim for an employee under the scheme for any time they are on unpaid leave or statutory sick pay related leave.

You can claim for an employee who is on:

  • annual leave;
  • leave taken on account of time worked under a flexible work time arrangement (flexi-leave);
  • family related statutory leave;
  • reduced rate paid leave following a period of family related statutory leave.

Any time they are on these types of leave while flexibly furloughed counts as furloughed hours and does not count as time actually worked.

Return to menu


What is the minimum furlough pay for furloughed employees?

The minimum furlough pay is the lesser of either:

  • 80% of their usual wage
  • the maximum wage amount

If your employee is flexibly furloughed the minimum furlough pay depends on their working and furloughed hours. Start with the lesser of:

  • 80% of their usual wages
  • the maximum wage amount
  1. Multiply by the employee’s furloughed hours.
  2. Divide by the employee’s usual hours.

This is the minimum amount you must pay your employee for the time they are recorded as being on furlough. You can choose to pay more than this but you do not have to.

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.

Return to menu


Do I have to pay national minimum wage?

National minimum wage (NMW) rules do not apply to furloughed hours and this may mean that the 80% rate is below the NMW, which is legally acceptable. However whilst it’s not stated in the guidance, HMRC are of the opinion that employers should top up any furlough pay to meet NMW rates, although there is no obligation on employers to do so. If any compulsory training is undertaken NMW will apply for this time, even if this is more than the 80% being funded through the scheme.

If an employee is flexibly furloughed, they must be paid their normal wage which must be at least NMW for the hours that they have worked.

Return to menu


What about the Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions I can claim for? 

Once you’ve worked out how much of an employee’s salary you can claim for, you must then work out the amount of Employer National Insurance Contributions and minimum automatic enrolment employer pension contributions you are entitled to claim. The amount of Employer National Insurance Contributions you claim for should not be higher than 13.8% of the grant for that employee’s wages.

For periods starting on or after 1 August you will not be able to claim a grant towards the Employer National Insurance Contributions you’ve paid on the grant for your employees’ wages and you will be liable to make these payments yourself. HMRC has guidance and formulas with worked examples for the different scenarios on their website.

The minimum automatic enrolment employer pension contribution i.e. 3% on qualifying earnings is the maximum amount employers can claim for. The whole pension amount claimed must be paid into a pension scheme for the employee as an employer contribution. For periods starting on or after 1 August you will not be able to claim a grant towards the employer pension contributions you’ve paid in relation to your employees’ wages and you will be liable to make these payments yourself. HMRC has guidance and formulas with worked examples on their website.

Where you have agreed the terms of furlough to include 80% of the employees’ regular wage, it is at your discretion to make any additional top-up. Employer National Insurance Contributions and automatic enrolment contribution on any additional top-up salary will not be funded through this scheme but you will still be liable to pay these. The above links give more guidance with worked examples of what extra you may have to pay. Any voluntary automatic enrolment contributions above the minimum mandatory employer contributions will also not be funded.

Return to menu


What happens to the employee’s rights during a period of furlough?

The employee will remain employed during the leave and continue to benefit from their statutory and contractual rights, other than the right to pay. Holiday rights will continue to accrue, see – ‘What happens to holiday rights during furlough?’. As part of the agreement to furlough it may be possible to agree to vary some of the contractual rights so that they don’t apply during furlough but this will be a matter of negotiation between employer and employee.  For those employees with two years of more service, they will continue to be protected employees and have the right to make a claim for any unfair dismissal during a period of furlough.

Employees who are flexibly furloughed from 1 July onwards will be entitled to be paid their normal wage for the hours they work. There is no Government contribution towards any of these wage costs.

Return to menu


What happens to holiday rights during furlough?

Furloughed employees continue to accrue leave as per their employment contract. During furlough the employer and employee can agree to vary holiday entitlement only which is over and above the 5.6 weeks of statutory paid annual leave. HMRC have confirmed that employees can take holiday whilst on furlough. If a furloughed employee takes holiday, the employer should pay the usual holiday pay in accordance with the Working Time Regulations (WTR). Employers will be obliged to top up the grant from the CJRS for any time deemed to be holiday and ensure that full holiday pay is paid for that day/s.

If an employee is flexibly furloughed then any hours taken as holiday during the claim period should be counted as furloughed hours rather than working hours. Employees should not be placed on furlough for a period simply because they are on holiday for that period.

Any requests for holiday from the employee or requirements by the employer to take holiday should be made as per the employer’s and WTR procedures.

If an employee usually works bank holidays then the employer can agree that this is included in the furloughed period and payment. If the employee usually takes the bank holiday as leave then the employer must either top up the furlough pay to their usual holiday pay or keep it as a furlough day and give the employee a day of holiday in lieu.

HMRC have said that as this is such an unprecedented time, they are keeping the policy on holiday pay during furlough under review. If there are any further changes our guidance will be updated to reflect this.

The Government has produced a new online guide which gives an explanation of how holiday entitlement and pay operate during the coronavirus pandemic and where it differs from the standard holiday entitlement and pay guidance, including how furloughed employees may be affected.

Return to menu


How do I claim on the CJRS?

Claims must be made by 31 July 2020 for any claim period ending on or before 30 June 2020 via the online portal available here. For claims relating to any period beginning on or after 1 July, the earliest date to submit a claim is 1 July. To make a claim you will need the Government Gateway user ID and password you got when you registered for PAYE online.

To claim, you will need:

  • your ePAYE reference number – you must have enrolled for PAYE online;
  • the number of employees being furloughed;
  • National Insurance numbers for the employees you want to furlough (if you do not have National Insurance numbers for an employee, or are using a temporary number, you will need to contact HMRC);
  • names of the employees you want to furlough;
  • payroll/works number for the employees you want to furlough (optional);
  • your Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number;
  • the claim period (start and end date) - claims should be started from the date that the employee finishes work and starts furlough, not when the decision is made, or when they were written to confirming their furloughed status;
  • amount claimed (per the minimum length of furloughing of 3 weeks);
  • your bank account number and sort code (this should be an account which accepts BACS payments);
  • your contact name; and
  • your phone number

If you have less than 100 furloughed employees you will need to enter details of each employee directly into the system.

If you have 100 or more furloughed staff you will need to upload a file with the information rather than input it directly into the system. HMRC will accept the following file types:

  • .xls
  • .xlsx
  • .csv
  • .ods

The file should include the following information for each furloughed employee:

  • Name,
  • National Insurance number,
  • Claim period and claim amount,
  • Payroll/employee number (optional),
  • Usual hours and actual hours worked by any flexibly furloughed employees.

The file should:

  • only contain the employee information listed above- if you provide more or less information than required, you may risk delaying your payment and/or be asked to provide the information again;
  • have one line per employee for the whole period;
  • have one claim period and not be broken up into multiple periods within the claim; and
  • not have split data by contract type.

HMRC has a template to use for claim periods starting on or after 1 July 2020.

You will need to calculate the amount you are claiming. HMRC have the right to retrospectively audit all aspects of your claim.

Claims may be backdated to 1 March 2020 if applicable. A claim cannot start any earlier than the date the employee was first furloughed, this is the date they stopped working, not necessarily the date you wrote to them confirming the furlough arrangements. You can only claim for periods when your employee was on furlough.

You cannot make more than one claim during a claim period - you should make your claim shortly before, during or after running your payroll. For any claim that you make, the claim end date must be no more than 14 days in the future from the date the claim is made. Any claim period must contain all the furloughed days that the claim amount relates to. Any saved claim must be completed within seven days of starting it.

Employers must decide themselves how long their claim period is, taking into account how often payroll is run. It is advisable to try to match a claim period to the dates when payroll is processed, where possible. If more than one claim is made, the subsequent claim cannot overlap with any other claim that has been made. You must claim for all employees (including flexibly furloughed employees) in each period at one time, even if they are paid at different times – you cannot make changes to your claim or make another claim for the same period or one that overlaps. Claim periods should follow one after another, with no gaps in between, where employees have been continuously or flexibly furloughed.

Claims for any periods starting before 1 July must end on or before 30 June. This is the case even where an employee furloughed in June continues to be furloughed full time in July. Separate claims will need to be submitted to cover the days in June and the days in July. This may mean that your claim periods will differ from the pay periods you use. Claims for periods ending on or before 30 June 2020 must be made by 31 July 2020.

From 1 July, when claiming the CJRS grant for furloughed hours; employers will need to report and claim for a minimum period of 7 days unless they’re claiming for the first few days or the last few days in a month. Employers can only claim for a period of less than seven days if the period being claimed for includes either the first or last day of the calendar month, and the employer has already claimed for the period ending immediately before it.

As part of the new changes being introduced, claim periods will no longer be able to overlap months. Employers who previously submitted claims with periods that overlapped calendar months will no longer be able to do this going forward. If your pay period includes days in more than one calendar month, you’ll need to submit separate claims covering the days that fall into each month. You should calculate each of those claims separately. More details with examples are in HMRC’s guidance. Employers will be able to continue to make claims up to 14 days before in anticipation of an imminent payroll run, at the point payroll is run or after payroll has been run. Where claiming for employees who are flexibly furloughed, it’s important to ensure that the claim is accurate otherwise you will have to pay back any overpayment, therefore it is best practice to wait until the exact hours are known before claiming.

Employers can make their first claim under the new scheme rules from 1 July. When claiming for employees who are flexibly furloughed employers should not claim until they are sure of the exact number of hours worked during the claim period. If a claim is made in advance and the employee works for more hours than HMRC have been told about, then some of the grant will have to be repaid to HMRC.

When claiming for employees who have been flexibly furloughed you will need to include the number of hours they usually would work in the claim period and the number of hours they have or will work in the claim period. You will also need to keep records of the number of hours the employee has been furloughed for in the claim period, the hours actually worked and what the usual working hours would have been for that period.  

If an error is made when claiming you will have 72 hours to delete the claim. If a mistake is made that has resulted in an overclaimed amount, you must pay this back to HMRC. This can be done as part of your next claim. You will be asked when making your claim whether you need to adjust the amount down to take account of a previous error. Your new claim amount will be reduced to reflect this. You do not need to take further action but should keep a record of this adjustment for six years. If you have made an error that has resulted in an underclaimed amount, you should contact HMRC to amend your claim. If you have made an error in a claim and do not plan to submit further claims, you will need to contact HMRC to let them know about the error and find out how to pay back any overclaimed amounts. HMRC will then give you a payment reference number and you will be directed to make a payment which must be made within 30 days. If HMRC spot an error then, where possible, they will contact you or your agent to correct the claim. Click here for new guidance from HMRC specifically on what to do in these circumstances.

HMRC is introducing legislation to recover overclaimed grant amounts through the tax system. If you repay any overclaimed grant amounts back through the above methods then this will reduce or, if the full amount is repaid, prevent any potential tax liability under that legislation.

If you’ve overclaimed a grant and have not repaid it, you must notify HMRC by the latest of either:

  • 90 days after the date you received the grant you were not entitled to
  • 90 days after the date you received the grant that you were no longer entitled to keep because your circumstances changed
  • 20 October 2020

Click here for further guidance on this and the possible penalties.

HMRC will pay eligible grants via BACS payment to a UK bank account within six working days.

Employers must keep a copy of all furlough pay and claims records for six years, including:

  • the amount claimed and claim period for each employee;
  • the claim reference number;
  • the calculations used in case HMRC need more information;
  • for flexible furloughed employees: the usual hours they work and the actual hours worked.

When the scheme is closed HMRC will continue to process claims submitted up until the point of closure.

Return to menu


What about employees who are already away from the workplace for other reasons?

Unpaid leave

Employees who were placed on unpaid leave prior to 28 February 2020 cannot be furloughed until that period of unpaid leave has come to an end. If the unpaid leave started after 28 February it will be possible to furlough that employee. When calculating the furlough wage for these employees use the amount they would have been paid if they were on paid leave. The furlough period must have started on or before 10 June 2020.

Sick leave or self-isolation

Employees who are on sick leave or self-isolating would continue to be entitled to SSP or employers’ sick pay as appropriate, unless it has been agreed that they are eligible and should be furloughed, in which case they would be entitled to a furlough wage instead. It will be for the employer to decide if they wish to furlough an employee who is off sick. Where an employee is to be furloughed and they have been off sick and not received a full wage, their salary from their last pay period before 19 March 2020 should be used to calculate the 80% furlough wage, not the actual pay received during the period of sick leave. Where there is no fixed salary the 80% furlough wage should be calculated using either the same month’s earnings from the previous year, or average monthly earnings for the 2019-2020 tax year. The £2,500 per month maximum will continue to apply.

These employees may only be furloughed on or after 1 July where they have previously been furloughed for three consecutive weeks between 1 March 2020 and 30 June 2020.

The CJRS is not designed to cover short-term absences and where the absence period is likely to be less than three weeks, sick leave is likely to be the most appropriate type of leave.

Employers can claim from both the CJRS and SSP rebate scheme for the same employee but not in relation to the same period of time.

Shielding

Government guidance has stated that “employees who are shielding in line with health guidance (or need to stay at home with someone who is shielding)” can continue to be placed on furlough, so long as the employer has submitted a claim for them regarding a furlough period of at least three consecutive weeks between 1 March 2020 and 30 June 2020.

Employees with caring responsibilities

Employees who are unable to work because they have caring responsibilities resulting from coronavirus can be furloughed, this could include employees that need to stay at home to look after their children. When agreeing to furlough employees due to their caring responsibilities, it is advisable to ensure they are obliged to notify you of any change in their circumstances and you may want to take steps to ensure they are not authorised to take another job whilst being furloughed by you IF you have work available for them to do.

As with other employees who are furloughed, the employer must have submitted a claim for them for a furlough period of at least three consecutive weeks between 1 March 2020 and 30 June 2020 in order for them to be eligible to be furloughed again on or after 1 July 2020.

Employers should remember there is no obligation to furlough any employee including where the employee has requested it. Employers should make any furlough decisions based on what the needs of the business are.

Statutory parental leave

If you have any employees who are on or plan to take maternity, adoption, paternity, shared parental leave or parental bereavement leave then you should pay them their statutory pay rights as the normal rules apply. Although, you may need to calculate your employee’s average weekly earnings differently, if your employee was furloughed and then started leave on or after 25 April 2020 for:

If your employee is getting Maternity Allowance while they’re on maternity leave, they should not get furlough pay at the same time. If your employee has agreed to be put on furlough, tell them to contact Jobcentre Plus to stop their Maternity Allowance payments.

Employers can claim through the CJRS any enhanced additional contractual payments made in relation to a period of paid maternity, adoption, paternity, shared parental leave or parental bereavement leave.

Where an employee is to be furloughed upon their return from any of these statutory periods of leave, their salary from their last pay period before 19 March 2020 should be used in calculating their 80% furlough wage, not the actual pay received during the leave. Where there is no fixed salary the 80% furlough wage should be calculated using either the same month’s earning from the previous year, or average monthly earnings for the 2019-2020 tax year. The £2,500 per month maximum will continue to apply.

Return to menu


What if my employee becomes sick while furloughed?

Furloughed employees retain their statutory rights, including their right to Statutory Sick Pay (SSP). This means that furloughed employees who become ill must be paid at least SSP, in most cases the furloughed wage will meet this requirement. It is up to employers to decide whether to move these employees onto sick leave and SSP or to keep them on furlough, at their furloughed rate.

If a furloughed employee who becomes sick is moved onto SSP, you will no longer be able to claim through the CJRS for this time on sick leave as you are required to pay SSP yourself. If the employee is absent due to coronavirus, you may qualify for a rebate for up to two weeks of SSP through the SSP rebate scheme. If you decide to keep the sick furloughed employee on the furloughed rate, you will remain eligible to claim for these costs through the CJRS scheme, subject to the scheme’s rules. For more detail concerning the SSP rebate scheme, please see What SSP can I reclaim and how do I do this? in our separate coronavirus Q&A.

There must still have been a three-continuous-week period of furlough between 1 March 2020 and 30 June 2020 in order to claim any of the furlough wage from the CJRS.

Return to menu


What about new employees that I have under TUPE?

If new employees have transferred to you after 28 February 2020 you are entitled to claim under the CJRS for any of these employees who have been furloughed, subject to the rest of the scheme rules.

For more information on this please refer to HMRC’s guidance.

Return to menu


What if I have consolidated my payroll?

Where a group of companies have multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 28 February 2020, the new scheme will be eligible to furlough those employees and claim the grants available under the CJRS, subject to the scheme’s rules. For more information on this please refer to HMRC’s guidance.

Return to menu


What happens at the end of furlough?

When the government ends the scheme, you will need to assess the situation at that time to determine if all of your furloughed employees can return to work. You should then contact them to make the appropriate arrangements for their return. ACAS has template letters for employers to use when ending or extending a period of furlough.

They should then return to the same role as before their furlough leave and on the same terms and conditions. Their continuity of employment will not have been broken.

Please see our separate Q&A for queries you may have about bringing people back into the workplace after furlough or other periods of absence. If you have any queries about making your workplace ‘COVID-19 secure’ please see our Q&A specifically dealing with these issues.

If it is not possible to for them to return to the same role either because it is no longer available or because you are not planning to continue with the business then you will need to start a consultation process for redundancy. The CJRS will not cover any redundancy payments. Please contact CallFirst for further advice if you find yourself in such a situation after furlough has ended.

Return to menu


What are the tax implications of the Coronavirus Job Retention Grant?

Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.

A new Reporting payments in PAYE Real Time Information from the Coronavirus Job Retention Scheme webpage has been launched with guidance on how to report the payments.

Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes. For further advice please contact CallFirst to speak with one of our tax specialists.

Return to menu

Coronavirus: Updates and advice

This news hub on NFUonline will be updated regularly to keep you up to date with what you need to know and how to deal with the various issues raised by coronavirus. Visit the hub.




© 2020 - NFUonline