FAQs: Coronavirus Job Retention Scheme (CJRS)

Justin Rix Justin Rix

The Government announced on 12 May 2020 an extension of the CJRS to 31 October 2020. Justin Rix answers your frequently asked questions about claiming from the scheme.

The Chancellor has announced that the CJRS is being extended for an additional four months to 31 October 2020, with employees continuing to receive 80% of their current salary, up to £2,500. From 1 August furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed employees. The employer payments will substitute the contribution the government is currently making, ensuring that employees continue to receive 80% of their salary, up to £2,500 a month.

More specific details and information around implementation of the changes to the scheme will be made available by the end of this month.

Furlough process and definitions

Under CJRS, can employees transferred under TUPE be furloughed?

Employees moved under the Transfer of Undertakings (Protection of Employment) regulations (TUPE) after 19 March still qualify for the CJRS and can be furloughed, so long as either the TUPE or PAYE business succession rules apply to the change in ownership. For more information, refer to guidance onTUPE rules and on business succession.

Is employee consent required to furlough and is there a sample furlough letter to employees?

Government guidance indicates that employers should discuss and agree CJRS with the identified employees and make any necessary changes to the contract of employment by agreement. Equality and discrimination laws will apply in the usual way, and employment law aspects should also be considered.

Employers should subsequently write to their employees confirming that they have been furloughed and keep a record of this communication. If an employee does not consent to furlough, the employer would retain what rights it has regarding redundancy.

Can the employer contact the employee during the furlough period?

While the government hasn’t specified any contact requirements, employers have a duty of care and should follow best-practice guidance to ensure the well-being of their employees. A furloughed employee can take part in voluntary activities or training, so long as it doesn’t constitute work or generate revenue for, or on behalf of the organisation.

Who qualifies as a "shielded employee" or "vulnerable worker" and how does the CJRS apply?

Employees who are shielded in line with public health guidance can be placed on furlough. Employers must take adequate steps to protect vulnerable people and ensure they follow social-distancing measures. Those who are considered "extremely vulnerable" as defined on medical grounds will receive a letter from the NHS confirming an isolation period of 12 weeks. Employers should support staff during this period and keep in touch during their absence.

Can employers rotate employees in and out of furlough?

Yes, the guidance indicates that employees can be furloughed multiple times provided that each time is for a minimum of 3 weeks. The CJRS scheme will run from 1 March to 31 October 2020, and new flexibilities are expected to be introduced from 1 August.

If an employee is unable to work due to childcare responsibilities, can they be furloughed?

Yes. Employees who are unable to work due to caring responsibilities as a result of coronavirus, including childcare, can be furloughed.

How should employers treat holidays during furlough?

Furloughed employees continue to accrue holiday and can take them in the usual way if their employer agrees. They must be paid in full for the holiday period in accordance with the Working Time Regulations. Employers will need to pay additional amounts over the grant for the holiday period, through will have the flexibility to restrict annual leave when there is a business need. If employees have annual leave booked and ask not to take it, employers can insist that they take the time off and have the right to tell employees when to take holiday.

Employers must give the employees an advanced notice period consisting of either:

  • double the length of the holiday if they are asking employees to take holidays on certain days
  • the length of the holiday if the employer asks employees to cancel a planned holiday. Less notice may be applicable but requires the employee’s agreement.

Where there is a bank holiday and furloughed workers would normally take it as annual leave, the bank holiday must be paid in full or a deferred to later in the year. Either way, the employee should receive their full holiday entitlement.

The government has also introduced a temporary rule in respect of statutory holidays: anyone self-isolating, furloughed or continuing work, where it is not reasonably practical to take holiday as a result of COVID-19, can carry up to four weeks statutory holidays over for up to two years, however this law does not affect any contractual agreement already in place.

Can employees carry out principle activities during CJRS furlough?

No, a key requirement of the scheme is that employees do not do any work, service or generate revenue for the organisation or any of its associated companies. However, a furloughed employee can take part in voluntary activities or training. On 12 May 2020, the Chancellor announced that there will be some flexibilities introduced from 1 August, which will allow furloughed employees to return to work part time, with employers being asked to pay a percentage towards the salaries. Further details on how this will work in practice are expected in due course.

If an employee is considered high-risk and needs to self-isolate, can they be put on furlough?

Yes. People who are shielding in line with public health guidance can be placed on furlough. For more information, see the guidance on shielding and protecting people defined on medical grounds as extremely vulnerable.

Do we have to furlough all employees or can it be done on an individual basis?

Employers can choose who they will offer CJRS furlough to and it can be done on an individual basis or collectively. Employment law, as well as equality and discrimination laws, will apply in the usual way, and it may be necessary to engage in a collective consultation process. Employers may need to seek legal advice.

Could an employer use this route and pay the employee a top-up to act as a retainer?

The purpose of furlough is to enable organisations to continue employing their people during this time of crisis. Employers may choose to top up a salary, however, this is at their discretion and they are not obliged to as part the scheme

Can furlough apply to employees training under the apprenticeship levy?

As employees on PAYE, apprentices can also be furloughed. ESFA guidelines indicate that where apprentices are furloughed or where the nature of their employment changes and no longer supports their apprenticeship, the apprentice, employer and the training provider should consider whether a break in learning would be appropriate. Guidance issued by HMRC indicates that furloughed employees are allowed to do training. If workers are required to complete online training courses, guidance indicates that “employers must pay at least the NLW/NMW for the time spent training, even if this is more than the 80% of their wage that will be subsidised”. If the learning is interrupted for more than four weeks, the apprentice should report a break in learning and payment to the provider should be suspended.

Can furloughed employees undertake work for other organisations while receiving these payments?

If the employee has more than one employer, each job is treated differently, and each company can apply for furlough separately. Employees can be furloughed in one job and continue working for another employer, or be furloughed in both jobs. The scheme only prevents the employee from doing any work for the same employer that has furloughed them or any connected organisations.

The updated guidance also covers situations where an employee may be offered new employment while on furlough. This is permitted under the scheme, albeit subject to any restrictions in the relevant employment contract prohibiting additional employment. This means, in practice, an employee could receive 80% of their wages from their existing employer through furlough, plus the wages they receive from a new employer. An employer that takes on a new employee who has been furloughed from another company, must complete Statement C in the starter checklist.

Can furlough apply to PSCs that employ the owner?

Directors and owner-managers would qualify, so long as they are on PAYE payroll. This also applies to individuals who are directors of their own personal services company (PSC). While a key condition is that they can’t undertake any work, if they have statutory duties to the company which need to be fulfilled in accordance with the Companies Act, such as filling of company accounts, these are not considered as ‘work’ and therefore they will be allowed to carry on with those duties whilst on furlough. Under no circumstances are directors allowed to carry out any other activities that may generate commercial revenue or services for the company. This decision, including if there is more than one director, should be made at board level and duly recorded and communicated to the concerned individuals.

If an employee is working reduced hours, would the scheme re-imburse 80% of the rest of their normal wage?

No. A key requirement of the scheme is that furloughed employees cannot undertake any work or services for their employer. If an employee is working on reduced hours, they will not be eligible. However, some flexibilities will be introduced from 1 August which will allow furloughed employees to work part time. Further details are expected to be announced later this month.

What happens to employees on furlough benefits?

It is critical to consider what furlough means for employee benefits programmes. Contractual obligations cannot be overlooked, benefits that form part of an employee’s contract need to be guaranteed and the terms and conditions of the contract amended. Under the scheme, the reference salary should not include the cost of non-monetary benefits. Benefits provided through salary-sacrifice schemes, including pension contributions, should not be included in the claim and should be paid in addition to the wages.

Normally, an employee cannot switch freely out of a salary-sacrifice scheme unless a relevant 'life event' occurs. However, HMRC considers the COVID-19 outbreak to be a life event that could warrant changes to salary-sacrifice arrangements, if the relevant employment contract is updated. I recommend seeking additional advice from an employee benefits consultant or tax advisor on this point.


Does the CJRS apply to employees who were made redundant prior to 20 March as a consequence of the crisis?

The scheme would apply to anyone that was employed and on payroll as of 28 February 2020 (ie notified to HMRC on an RTI submission on or before 28 February) and was made redundant, as long as they are subsequently re-hired by the employer, prior to 19 March 2020, as long as they are subsequently re-hired by the employer.  

Does the CJRS apply to UK employees working overseas?

The government has not specified if the employee place of work has any relevance. The key requirements are that the employer should be a UK business with a UK bank account and a PAYE scheme set up on or prior to 19 March 2020, and that employees eligible to be furloughed should be on the PAYE payroll, and a payment to them should have been notified to HMRC on an RTI submission on or before 19 March.

Does the CJRS apply to part-time or zero-hour contracts?

Yes. Furlough is applicable to any type of contract, including full-time and part-time employees, employees on agency contracts and employees on flexible or zero-hour contracts.

Can employees claim redundancy pay while on CJRS?

No. The goal of the scheme is to keep employees on-payroll, albeit with a portion of their wages only. This does not constitute redundancy and, therefore, no entitlement to redundancy pay arises.

Claiming process

What employees can be claimed for under CJRS?

Updated HMRC guidance confirms that employers can only claim for employees that were on the PAYE payroll or on before 19 March 2020, and which were notified to HMRC on an RTI submission before that date. Employees can be on any type of contract and employers can also furlough foreign nationals as the grants are not considered ‘access to public funds’.

How is the CJRS grant claimed from HMRC?

HMRC launched an online portal to process claims on 20 April. HMRC anticipates it will take four-six working days to process payments, with the first payments from 30 April. Employers can only make one claim per pay period, but the claim can be made up to 14 days in advance, so that funds are received in time to pay employees in line with the usual timetable.

The information needed to process a claim includes:

  • your employer PAYE reference number
  • the number of employees being furloughed
  • National Insurance numbers for the furloughed employees
  • the names of the furloughed employees
  • the payroll/employee number for the furloughed employees (optional)
  • your name as the employer, self-assessment, Unique Taxpayer Reference or corporation tax Unique Taxpayer Reference or company registration number​
  • the claim period start and end date
  • amount being claimed per the minimum length of furloughing of three consecutive weeks
  • your bank account number and sort code
  • your contact name
  • your phone number

The employer will need to calculate the amount to be claimed and retain all records and calculations. HMRC will retain the right to retrospectively audit all aspects of the claims. If you are claiming for 100 employees or less, you will need to enter the details for each employee. If you are claiming for more than 100 employees you can upload the data in bulk using files in .xls, .cvs, xlsx or .ods.

What happens after the CJRS claim?

Once HMRC have received a claim and deemed it eligible for the grant, it will pay by BACS payment to a UK bank account. Employers must pay the employees all the grant received for their gross pay and no fees can be charged from the money that is granted.

What proof will HMRC expect to see that the employee is not doing any work?

The government has not specified any evidence required to prove that an employee is not working, however they retain the right to audit any aspect of the claims and any claims found to be fraudulent or dishonest may require payments to be repaid in HMRC in full and may lead to prosecution.

Will HMRC need to see a business case and the basis of selection of employees moving on to the scheme?

HMRC has not requested a business case. Employers should discuss the furlough option with employees, and any changes to the employment contract must be done 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 through collective consultation to procure agreement to changes to terms of employment. Employers should keep records of all communications to support their decisions and potential future audits from HMRC.

What happens if the company doesn’t take the employee back on after the lockdown? Does this affect repayments?

No. A company can decide on redundancy at any point, even during the furlough period, and the process would apply in the regular way. HMRC has indicated that, if and when the scheme closes, it will continue to process any remaining payments during that period.

Do the furlough wages need to be paid back by the employer in the future?

No. This a government grant, not a loan. However, HMRC retains the right to retrospectively audit all aspects of claims and may withhold payments or ask for repayment in full if the claims are found to be dishonest.

How are the earnings calculated?

HMRC will contribute the lower of 80% of the employees’ regular wage or £2,500 per month. Employers may choose to top up an employee’s salary beyond this, but are not obliged to do so. For full- and part-time salaried employees, the employee’s actual salary before tax, as of 19 March should be used to calculate the 80%. Discretionary fees, commission and bonuses should not be included. For those employees on zero-hours contracts or where their pay varies, employers should calculate the amounts as follows:

  • If employed for 12 months prior to being furloughed, claim either the same month’s pay as the previous year or average monthly earnings for the 2019/20 tax year, whichever is higher
  • If employed for less than 12 months, claim an average of their monthly pay for that period
  • If employed for less than a month, use a pro-rata of their wages so far

There is a calculator available on the portal to assist you with this. Full guidance on how to claim wages available by following this link.

HMRC’s contribution may change where furloughed employees return to work part-time from 1 August 2020. Further details on this are expected to be announced later this month.

Should employers retain income tax?

Yes. While on furlough, employees are subject to income tax and other deductions.

Do employers have to pay National Insurance contributions?

Yes, but the grant from HMRC covers 80% (or £2,500, whatever is lower) plus the associated Employer National Insurance contributions and up to the level of minimum automatic enrolment employer pension contributions on that wage. The amount claimed should include:

  • regular wages you pay to employees
  • non-discretionary overtime
  • non-discretionary fees
  • non-discretionary commission payments
  • piece rate payments

It should not include tips, non-cash payments and non-monetary benefits, such as a company car.

For more support with identifying the right options for you, as well as assistance with furloughing employees and supporting HR departments, contact Justin Rix.


The information provided in these FAQ is based on the guidance issued to date by the government/HMRC and there are still areas that require further clarification. These guidelines are indicative and should not be relied on for advice at this stage.