FAQs: Coronavirus Job Retention Scheme (CJRS)

Justin Rix Justin Rix

The Government announced a new Job Retention Bonus to reward and incentivise employers who retain their furloughed employees:

  • This will be a one-off payment of £1,000 to UK employers for every furloughed employee who remains continuously employed to the end of January 2021
  • Employees must earn above the Lower Earnings Limit (£520 per month) on average between 1 November 2020 and 31 January 2021
  • Payments will be made from February 2021. Further guidance will be published in September.

CJRS extension to 31 October

On 12 May 2020, the Chancellor announced that the CJRS is being extended for an additional four months to 31 October 2020, with some practicalities further announced on 29 May, as follows:

  • In June the scheme continues in its current form and will close to new entrants on 30 June. If employers wish to furlough people who have not been furloughed before, they need to be placed on furlough prior to 10 June to meet the requirement of three consecutive weeks furloughed by 30 June to qualify
  • From 1 July, the scheme continues in its current form with the addition that employees will be able to return to work part time or in any shift pattern and be furloughed for those normal hours not worked. When claiming these hours, employers will need to report and claim for a minimum one-week period
  • From 1 August, the Government will continue to pay 80% of wages up to £2,500, however employers will pay ER NICs and pension contributions.
  • From 1 September, the Government will pay 70% of wages up to £2,187.50, and employers will pay ER NICs and pension contributions, as well as 10% of the wages to make up 80% total to a cap of £2,500
  • From 1 October, the Government will pay 60% of wages up to £1,875, and employers will pay ER NICs and pension contributions, as well as 20% of the wages to make up 80% total to a cap of £2,500

Claims for July onward can be submitted from 1 July and claims for the period to 30 June will be accepted until 31 July at the latest (with an exception for those returning from parental leave after 30 June).

Justin Rix answers your frequently asked questions about claiming from the scheme.

Furlough process and definitions

Which employees qualify for the Job Retention Bonus?

Employers can claim for employees who were furloughed and a claim successfully submitted under the CJRS. Employees should be under continuous employment from the date of the last claim until 31 January 2021. They should receive a minimum average pay of £520 per month (recorded through HMRC RTI) or an average of £1,560 across the three months (with earnings reported on each calendar month). Employers must have updated RTI records for the period to the end of January, and employees must not be serving a contractual or statutory notice period.

Criteria is applicable to all employees, including office holders, company directors, agency working and those employed by umbrella companies.

How can employers claim for the Job Retention Bonus?

Employers will be able to claim the bonus from February 2021. In the interim, employers should ensure that all records are up to date and wages correctly reported through HMRC RTI reporting system. It is also important to ensure that all claims have been correctly submitted and any necessary adjustments reported to HMRC. Further details on the process for claiming will be published end of September 2020.

Under CJRS, can employees transferred under TUPE be furloughed?

Employees moved under the Transfer of Undertakings (Protection of Employment) regulations (TUPE) after 28 February 2020 qualify for the CJRS and can continue to be furloughed, so long as either the TUPE or PAYE business succession rules apply to the change in ownership and a claim for those employees had been submitted for a furlough period of minimum 3 weeks between 1 March and 30 June.  If employees transferred after 10 June 2020, they may also qualify for furlough so long as the previous employer had claimed for them in respect of furlough for a minimum of 3 weeks between 1 March and 30 June. A new employer may be able to claim for the Job Retention bonus if the employees had been successfully furloughed and claimed for. An employer will not be eligible for the Job Retention bonus for any employees transferred under TUPE or under business succession rules after 31 October 2020.

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

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 for 6 years. From 1 July, employees are able to return to work part time and be furloughed for the hours not worked. Employers will need to agree the flexible furlough arrangements with the employees (or reach a collective agreement with the trade unions) and keep the written agreements, plus a record of the number of furloughed hours during the claim period. 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 or associated organisations.

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, as long as they have been furloughed for a minimum of three weeks prior to 30 June. 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. This also applies to employees who are unable to work because they have caring responsibilities.

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 and at least one claim has been made during the period 1 March – 30 June The CJRS scheme will run from 1 March to 31 October 2020, and, from 1 July, employees will be able to return to work part time and be furloughed for the hours not worked. The typical claim period is at least 7 days and must be claimed within each calendar month. It can be less than 7 days if it includes the first or last day of the month and you claimed for the period immediately prior. The employers will also be asked to contribute gradually towards the scheme payments as explained above.

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 continue to be furloughed so long as a claim has been made prior to 30 June.

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?

For the period 1 March to 30 June, a key requirement of the scheme was that employees must not do any work, service or generate revenue for the organisation or any of its associated companies. They could, however, take part in training or voluntary activities for other organisations. As explained above, from 1 July, furloughed employees will be allowed to return to work part time and be furloughed for the hours not worked. They must not perform any work activities during the furloughed hours.

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. As explained above, from 1 August, employers will be required to contribute a percentage of the furlough payments.

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. As an additional measure, the government will introduce a new payment for apprentices hired from 1 August 2020 to 31 January 2021. Payments will consist of £2,000 to employers in England for each new apprentice hired aged under 25, and £1,500 for 25 and over.

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 during the hours recorded as furlough 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). Whilst a key condition is that they can’t undertake any work during their furloughed hours, 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 during their furlough hours. 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?

A key requirement of the scheme is that furloughed employees cannot undertake any work or services for their employer whilst they are on furlough. From 1 July, employers will be allowed to bring furloughed employees back to work part time or any shift pattern, and claim the CJRS for the normal hours not worked. Employees will continue to receive 80% of their furloughed hours to a cap of £2,500, however, as explained above, employers will start contributing towards these payments, gradually increasing their contribution until 31 October.

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 and tax advisor on this point, please contact Ben Rowntree if you would like to further insights on this.

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. In addition, to furlough employees they must have been placed on furlough for at least three consecutive weeks between 1 March and 30 June 2020. The last date to claim for new employees is 30 June 2020 and the last date to claim for the period March-June will be 31 July 2020

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?

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. Furthermore, the Job Retention Bonus incentivises businesses to retain employees in continuous employment until 31 January 2020.

A new law has been issued to ensure that employees who are made redundant receive redundancy pay based on their normal wages, rather than the reduced furloughed wages, effective from 31 July 2020.

Which employees can be claimed for under CJRS?

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 on or before 19 March 2020. 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’. In addition, to continue to furlough employees they must have been placed on furlough for at least 3 consecutive weeks between 1 March and 30 June 2020. The last date to claim for new employees was 30 June 2020.

How is the CJRS grant claimed from HMRC?

HMRC launched an online portal on 20 April to process claims. HMRC anticipates it would take 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. 31 July was the last day to submit claims for periods ending on or before 30 June and the earliest employers can claim for periods for July onwards was  1 July. To make a claim, employers need to provide:

  • a registration for PAYE online
  • their UK bank account number and sort code (only provide bank account details where a BACS payment can be accepted)
  • the billing address on the bank account (this is the address on your bank statements)
  • the employer PAYE scheme reference number
  • the number of employees being furloughed
  • each employee’s National Insurance number (you will need to search for their number if you do not have it or contact HMRC if your employee does not have a number)
  • each employee’s payroll or employee number (optional)
  • the start date and end date of the claim
  • the full amounts of the claim including:
    • employee wages
    • employer National Insurance contributions (for claims up to 31 July)
    • employer minimum pension contributions (for claims up to 31 July)
  • their phone number
  • a contact name

They also need to provide either:

  • name (or the employer’s name if an agent is applying)
  • Corporation Tax unique taxpayer reference
  • Self Assessment unique taxpayer reference
  • company registration number

The employer will need to calculate the amount to be claimed and retain all records and calculations. Any flexible furlough arrangements must be agreed with the employees (or trade unions through collective agreement) . In this case employers will also need:

  • the number of usual hours your employee would work in the claim period
  • the number of hours your employee has or will work in the claim period
  • a record of the number of furloughed hours your employee has been furloughed in the claim period

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, .csv, .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, normally within six working days. 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. It is important that you keep a copy of all records for six years, including the amount claimed and claim period for each employee, the claim reference numbers and your calculations and rationale in case HMRC need more information about your claim at a later date. For employees on flexible furlough, include usual hours worked including any calculations that were required and actual hours worked, confirmation that you have made a claim and pay their wages if you haven’t already. 

What happens if I claimed too much, or not enough?

If you realise that you over-claimed, you have up to 72 hours to delete a claim on the online service. After this period, you must inform HMRC and pay the money back. You can inform HMRC at the next online claim and the amounts will be adjusted accordingly. If you are not planning to submit another claim, you can contact HMRC to return the payments. You have up to 90 days from the date you received the grant, and no later than 20 October 2020. Not informing HMRC of overpayments within these timelines may result in penalties.

If you made an error and did not claim enough, you should ensure that your employees receive the correct amount in the first instance. You will also need to contact HMRC to amend your claim.

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 at this stage, however we would advise to keep a record of the rationale and business case in any event, including the potential impact of Covid-19 on the organisation and how the workforce may have been affected. 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?

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 when the scheme closes, it will continue to process any remaining payments during that period. As stated above, HMRC will compensate employers with £1,000 per eligible employee that remains in continuous employment until 31 January 2021.

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. If you have made an error on the calculations you must inform HMRC and pay back any overclaimed amount.

How are the earnings calculated?

Before placing a claim, employers will need to calculate the length of the claim period, what to include when calculating the wages and the employees’ usual and furloughed hours. From 1 July, claim periods must start and end within the same calendar month and must be at least 7 days minimum period (as opposed to 3 weeks). You can make only one claim per period, so this should include all your full and flexible furloughed employees. The claim may be for less than 7 days if it includes the first or last date of each month and a claim had been submitted for the prior month.

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.

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 covered these amounts up to 30 June., From 1 July the employer will be responsible for paying the associated Employer National Insurance contributions and employer pension contributions on that wage.

If you need assistance for processing your claims, 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.