Claim for your employees’ wages through the Coronavirus Job Retention Scheme (CJRS) A step by step guide for employers
UPDATE 17 APRIL: Job Retention Scheme Extended By One Month
Thousands more employees will able to receive support through the Coronavirus Job Retention Scheme (CJRS) after the eligibility date was extended to 19 March 2020, the government announced today.
- eligibility cut-off date for Coronavirus Job Retention Scheme extended to 19 March 2020
- the change will mean thousands more workers can be furloughed
- scheme expected to be fully operational next week
Under the scheme announced by Chancellor Rishi Sunak last month, employers can claim a grant covering 80% of the wages for a furloughed employee, subject to a cap of £2,500 a month.
To qualify and to protect against fraudulent claims, individuals originally had to be employed on February 28 2020.
But following a review of the delivery system and to ensure the scheme helps as many people as possible, new guidance published today has confirmed the eligibility date has been extended to March 19 2020– the day before the scheme was announced.
Employers can claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020. This means that the employee must have been notified to HMRC through an RTI submission notifying payment in respect of that employee on or before 19 March 2020.
This change makes the scheme more generous while keeping the substantial fraud risks under control and is expected to benefit over 200,000 employees.
HMRC have been working at pace to delivering the scheme, which is due to be fully operational next week.
The CJRS is part of an unprecedented package of measures announced by the Chancellor to protect individuals and businesses.
This includes significant support for the self employed and immediate steps to give businesses access to cash to pay its rent, salaries or suppliers.
If any employer now thinks they are eligible for support, they can find out more here.
If you cannot maintain your current workforce because your operations have been severely affected by coronavirus (COVID-19), you can furlough employees and apply for a 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 that subsidised furlough pay.
This is a temporary scheme in place for 3 months starting from 1 March 2020, but it may be extended if necessary and employers can use this scheme anytime during this period. It is designed to help employers whose operations have been severely affected by coronavirus (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.
Who can make a claim?
You must have:
- created and started a PAYE payroll scheme on or before 19 March 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.
The Coronavirus Job Retention Scheme portal will be available from the end of April. Here’s how to Prepare for a claim.
HMRC also provided further clarifications on the eligibility of TUPE staff, those on long-term sick leave and those returning from parental leave, in its latest guidance on Coronavirus Job Retention Scheme (CJRS).
Employee transfers under TUPE and on a change in ownership
A new employer is eligible to claim under the CJRS in respect of the employees of a previous business transferred after 19 March 2020 if either the TUPE or PAYE business succession rules apply to the change in ownership.
Read more guidance on TUPE rules.
Read more guidance on business succession.
Where a group of companies has multiple PAYE schemes and there is a transfer of all employees from these schemes into a new consolidated PAYE scheme after 19 March 2020, the new scheme will be eligible to furlough those employees and claim the grants available under the CJRS.
If your employee is on maternity leave, adoption leave, paternity leave or shared parental leave
The normal rules for maternity and other forms of parental leave and pay apply.
You can claim through the scheme for enhanced (earnings-related) contractual pay for employees who qualify for either:
- maternity pay
- adoption pay
- paternity pay
- shared parental pay
Returning from statutory leave
Statutory leave includes maternity leave, paternity leave, shared parental leave, adoption leave, sick leave, and parental bereavement leave.
In line with other employees, claims for full or part-time employees furloughed on return from statutory leave should be calculated against their salary, before tax, not the pay they received whilst on statutory leave.
Claims for those on variable pay, returning from statutory leave should be calculated using either the:
- same month’s earning from the previous year
- average monthly earnings for the 2019-2020 tax year.
Download HMRC’s full guidance on CJRS here
It is very important that you seek legal advice, to ensure the appropriate changes are made to employment contracts if you are considering furloughing staff, and also to take tax advice to fully understand your obligations and the implications of furlough.
If you have any queries or concerns in relation to applying for the CJRS, or just generally in relation to your way forward through this coming period, please contact your adviser directly on 01942 816 512 or email us at [email protected]