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Coronavirus Job Retention Scheme

Duncan & Toplis | 9 March 2021

Updated 09.03.2021: In his Budget last week, the chancellor announced that the Coronavirus Job Retention Scheme will be extended until September 2021.

The furlough scheme has been extended until 30 September, employees will receive 80% for time not worked throughout the scheme, as is currently the case. Businesses will be asked to contribute to their employees' wages from July at 10%. This will be increased to 20% for August and September.

Under the scheme, employees will continue to receive 80% of their current salary for hours not worked, up to a maximum of £2,500.

Businesses will continue to have flexibility over bringing furloughed employees back to work on a part time basis or furlough them full time. There is no minimum period of furlough required, however employers can only claim for a minimum period of seven consecutive days. Employers will only be asked to cover National Insurance and employer pension contributions which, for the average claim, accounts for just 5% of total employment costs.

From December 2020, HM Revenue & Customs (HMRC) will publish the names of employers, and for companies and LLPs the company registration number, of those who have made claims under the scheme for the month of December onwards.

More details about this extension can be found on the government's website here.

The proposed introduction of the Job Support Scheme has been suspended until the CJRS ends and the Job Retention Bonus due to be paid to employers retaining previously furloughed employees has also been suspended.


For employees to be eligible under this extension of the scheme, they must be on an employer's PAYE payroll on 30 October 2020 if the claim period is on or before 30 April 2021. This means that the employer must have made a Real Time Information (RTI) submission notifying HMRC of a payment of earnings for that employee between 20 March to 30 October 2020.

After 1 May 2021, an employer can claim for employees who were employed on 02 March 2021. To be eligible, the employer must have made a Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021.

You do not need to have previously claimed for an employee before the 02 March 2021 to claim for periods from starting on or after 01 May 2021.

For claim periods between 01 November 2020 and 30 April 2021, employees who were on an RTI between 20 March 2020 and 30 October 2021 but were subsequently made redundant or stopped working for the company can also qualify for the scheme if they are re-employed.

For TUPEd employees, a new employer is eligible to claim as long as the employee transferred from their old employer to their new employer on or after 1 September 2020, they were employed by either their old employer or new employer on 30 October 2020 and they were on a PAYE RTI submission to HMRC by their old or new employer between 20 March 2020 and 30 October 2020.

Those who have been advised to shield due to a medical condition will be eligible for furlough leave or the employer can choose to pay them Statutory Sick Pay in line with their absence policy if they are unable to work from home. In either case, the employee should be notified in writing of the decision.

Employees who have caring responsibilities resulting from coronavirus, including childcare issues, will also be eligible for furlough.

The Government have confirmed that from 01 December 2020, any employees who are serving statutory notice for the company which falls after this date will not be eligible for claims under the new extension.

How do employers furlough their employees?

There will be some employers who have a lay off and/or short-time working clause in their contracts of employment, for them they can in principle lay off their employees or reduce the employees hours, advising them that they are furloughed or flexi-furloughed. In these cases, the employer would not need the employee’s agreement.

For many employers, there will not be a lay off or short-time working clause in their contracts. In these cases, they cannot simply tell the employee that they are furloughed, they must seek the employee’s agreement in writing first.

This written agreement should include:

  • confirmation of the furlough or flexible furlough arrangement
  • statement of the employee’s contractual hours and what their new temporary hours and/or start and finish times are
  • start date of the new arrangement
  • anticipated end date of the new arrangement

Failing to do this would be a breach of contract and would create a legal risk to the employer. The employee does not have to provide a written response to this agreement.

We would expect most employees to accept this request as the alternative in many cases would be redundancy. For some employers this could mean a complete closure of the business resulting in redundancy payments to employees, which would not be financially possible.

If you're unsure whether your employee contracts contain the relevant clauses or not, please contact our team who can review the content of your contracts and offer advice and templates accordingly.

Anyone with caring responsibilities resulting from coronavirus, including childcare issues, is also be eligible for furlough leave.

What to include when calculating wages

Employers can claim a grant for any regular payments that they are obliged to pay the employee. This is likely to include, but is still to be confirmed, the following:

  • Regular wages that the employee is paid by the employer
  • Non-discretionary payments including overtime pay*
  • Contractual, non discretionary fees
  • Contractual, non discretionary commission payments
  • Piece rate payments

*An employer must only include payments that they are obliged to pay their employees because they are contractual.

For example, if your employee has to work guaranteed overtime or non guaranteed overtime and you have laid out the rate of pay that the employee must receive if they work this overtime, you can include this in calculating your 80%.

Discretionary payments that are not mentioned in a contract but that are always paid may become contractual over a period of time and if this is the case, these too may be included in the calculation.

When referring to voluntary overtime, where this has become a regular work pattern and an expected element of your employee’s working week, and you have laid out the rate of pay that the employee will receive when working this overtime, this may be able to be included when you are calculating 80% of their wages but only if overtime payments were non-discretionary.

However, discretionary bonus payments, discretionary commission, tips and non-cash benefits in kind should be excluded. So if your employees benefit from private medical insurance or have a company car, these are not included in the calculation.

Where the employer provides benefits to furloughed employees such as private healthcare, this should be in addition to the wages that must be paid under the terms of the Job Retention Scheme.

100% of the grant money must be paid to the employee as money, and not reduced to pay for other benefits provided by the employer.

Calculating usual hours

Fixed hours

If an employee was not previously eligible for the scheme, then usual hours for an employee who is contracted for a fixed number of hours and whose pay does not vary according to the number of hours they work, will be the contracted hours worked in the last pay period ending on or before 30 October 2020.

Variable hours

If an employee was not previously eligible for the scheme then the usual hours will be the average hours worked between:

  • the start date of the 2020 to 2021 tax year
  • the day before their CJRS extension furlough periods begins

Advice for Clinically Vulnerable and Clinically Extremely Vulnerable

Clinically Vulnerable

Clinically vulnerable people are those who are:

  • aged 70 or over (regardless of medical conditions)
  • under 70 with an underlying health condition (that is, anyone instructed to get a flu jab each year on medical grounds)
  • pregnant

Clinically vulnerable employees can go to work, subject to all other restrictions, but must take extra care. Employees who are over 60 or in this category, could be at higher risk of severe illness from coronavirus and:

  • should be especially careful to follow the rules and minimise contacts with others
  • should continue to wash hands carefully and more frequently than usual and maintain thorough cleaning of frequently touched areas in the home and/or workplace

Clinically Extremely Vulnerable

There are two ways that an individual may be identified as clinically extremely vulnerable:

  • They have one or more of the health conditions listed here
  • Their clinician or GP has added them to the Shielded Patient List because, based on their clinical judgement, they deem the individual to be at higher risk of serious illness if they catch the virus.

People who are defined as clinically extremely vulnerable are at very high risk of severe illness from coronavirus. Employees who fall under this category cannot go to work, either they should work where possible or be placed on sick leave (or potentially furlough).

Error reporting to HMRC and penalties

HMRC has published guidance on what to do if you find you have claimed too much or not enough under the CJRS. Details can be found here.

HMRC has published guidance on the penalties due if they are not told about ineligible receipts or over payments under the CJRS.

Details of how HMRC decides how much the penalty will be, when you may have to pay a penalty and how to appeal against a penalty can be found here.

Click here to view CJRS and 'flexible furlough' FAQ


If you have any questions or queries that have not been answered above, please contact your usual account manager or submit an enquiry to our team here.

Please note, we are only able to offer advice and guidance from a business perspective and are therefore unable to answer any personal enquiries from individual employees.


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