Coronavirus Job Retention Scheme (CJRS)


What is it?

This is a scheme to help employers cover wages for employees on temporary leave (‘furlough’) due to COVID-19. It exists to help keep these employees on the payroll when the lack of work may have normally resulted in redundancy.

You can apply for a taxable grant that covers 80% of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on the amount of subsidised furlough pay.

This is a temporary scheme in place for 3 months starting from 1 March 2020, but it may be extended, and employers can use this scheme anytime during this period (minimum period is 3 weeks per employee).

Who is it for?

It is designed to help employers whose operations have been affected by COVID-19 to retain their employees and protect the UK economy. However, all employers are eligible to claim under the scheme and the government recognises different businesses will face different impacts from coronavirus.

You must have:

  • created and started a PAYE payroll scheme on or before 28 February 2020
  • enrolled for PAYE online
  • a UK bank account

Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities. However the use by public sector organisations is expected to be quite limited. There are specific rules on furloughing apprentices.

How much will I get, and when?

You can apply for a grant in respect of your furloughed employees, that covers 80% of the usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on the amount of subsidised furlough pay.

Regarding which workers can be included:

  • only those on payroll on 28 February (if they were made redundant after this date, they can be re-employed)
  • only those undertaking no work (this does not by default include people who are sick or self-isolating, as these employees will qualify for Statutory Sick Pay, although if there is no work for them they can still be included). They can undertake voluntary work or training.
  • they can be included if they are shielding or taking time off to care for someone (including children)
  • they can be included if they have another job – each employer needs to make their own decision
  • other workers who are not employees under law, so long as they are paid via PAYE (eg office holders/company directors, agency workers)

There is very specific guidance for certain types of worker in the government guidance.

The amount to claim per worker will be:

  • 80% of your employees’ wages (even for employees on National Minimum Wage) – up to a maximum of £2,500 per month.
  • Employer National Insurance contributions that are paid on the subsidised furlough pay.

Employer pension contributions that are paid on the subsidised furlough pay, up to the level of the minimum automatic enrolment employer contribution. The maximum level of grant for employer pension contributions on subsidised furlough pay is set in line with the minimum automatic enrolment employer contribution of 3% on qualifying earnings. Grants for pension contributions can be claimed up to this cap provided the employer will pay the whole amount claimed to a pension scheme for the employee as an employer contribution.

You can choose to top up your employee’s salary, but you do not have to.

The claim calculation should be based on February 2020 pay or where pay is variable, the higher of the February 2019 pay or the average monthly pay in the 2019-20 tax year.

How to apply

The online service you’ll use to claim is not available yet. HMRC expect it to be available by the end of April 2020.

Employers should discuss with their staff and make any changes to the relevant employment contracts by agreement. Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment.

To claim, you will need:

  • your employer PAYE reference number
  • the number of employees being furloughed
  • National Insurance Numbers for the employees you want to furlough
  • Names of the employees you want to furlough
  • Payroll/works number for the employees you want to furlough
  • your Self Assessment Unique Taxpayer Reference or Corporation Tax Unique Taxpayer Reference or Company Registration Number
  • the claim period (start and end date)
  • amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
  • your bank account number and sort code
  • your contact name
  • your phone number

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

HMRC will check your claim, and if you’re eligible, pay it to you by BACS to a UK bank account.

You must pay the employee all the grant you receive for their gross pay in the form of money.

Furloughed staff must receive no less than 80% of their reference pay (up to the monthly cap of £2500).

Employers cannot enter into any transaction with the worker which reduces the wages below this amount. This includes any administration charge, fees or other costs in connection with the employment.