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Coronavirus Job Retention Scheme

The Job Retention Scheme has been created to help employers cover the cost of wages during COVID-19 for employees and to retain jobs. 

Job Retention Scheme

If your business operations have been severely impacted by COVID-19, you can furlough your employees and claim 80% of their wages, up to a cap of £2,500 per month. 

Read the HMRC Guide

Claim for Wages through Online Service

Job Retention Bonus

A bonus of £1,000 will be paid to employers who have used the CJRS for each furloughed employee who remains continuously employed until 31 January 2021. You can still claim the bonus if you make a claim for that employee through the Job Support Scheme.

Job Retention Bonus Terms

This is a one-off payment of £1,000 to employers that have used the Coronavirus Job Retention Scheme (CJRS) for each furloughed employee who remains continuously employed until 31 January 2021. The bonus will provide additional support to retain employees. Businesses can claim from 15 Feburary until the end of March. 

Which employees an eligible employer can claim the Job Retention Bonus for

Claims will only be accepted for employees that were eligible for the scheme. Where a claim for an employee was incorrectly made, a Job Retention Bonus will not be payable.

Employers will be able to claim for employees who:

  • were furloughed and had a Coronavirus Job Retention Scheme claim submitted for them that meets all relevant eligibility criteria for the scheme
  • have been continuously employed by the relevant employer from the time of the employer’s most recent claim for that employee until at least 31 January 2021
  • have been paid an average of at least £520 a month between 1 November 2020 and 31 January 2021 (a total of at least £1,560 across the 3 months). The employee does not have to be paid £520 in each month, but must have received some earnings in each of the three calendar months that have been paid and reported to HMRC via RTI;
  • have up-to-date RTI records for the period to the end of January
  • are not serving a contractual or statutory notice period, that started before 1 February 2021, for the employer making a claim

Employers can claim the Job Retention Bonus for all employees who meet the above criteria, including office holders, company directors and agency workers, including those employed by umbrella companies. The above criteria must be met regardless of the frequency of the employee’s pay periods, their hours worked and rate of pay.

Employers will also be eligible for employee transfers protected under TUPE legislation, provided they have been continuously employed and meet the other eligibility criteria and the new employer has also submitted a CJRS claim for that employee.

As the scheme is designed to protect jobs, those who are serving notice for redundancy will not be eligible for the bonus.

The £1,000 Job Retention Bonus is equal to a 20% wage subsidy for the employment costs of the average person previously furloughed, but for those on lower incomes, it’s 40% of wage costs over the three-month period to the end of January 2021.

View HMRC Coronavirus Job Retention guide

Changes to the scheme

Below is key dates and information on the changes to contributions, announced as part of the changes to the scheme. 

Key Dates

10 June

  • The final date that an employer can furlough an employee for the first time, so that the required three-week furlough period can be completed by 30 June deadline. Employees who have already completed a full three-week furlough before, remain eligible for the scheme until it closes in October.
  • Those returning from statutory paternity and maternity leave will remain eligible for furlough after the 10 June cut-off date. However, this will only apply where they work for an employer who has previously furloughed employees.

30 June

  • From this date, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June. 

1 July

  • This is the first date you will be able to make claims for days in July, you cannot claim for periods in July before this point.
  • From 1 July, flexible furloughing begins - employers can bring furloughed employees back to work for any amount of time and any shift pattern.
  • If an employer chooses to bring back staff part-time, they will be responsible for paying this proportion of their wages, while still being able to claim CJRS grant for the hours not worked. Flexible furloughing continues until the scheme closes.
  • Also, from 1 July, the number of employees an employer can claim for in any claim period cannot exceed the maximum number they have claimed for under any single previous claim under the current scheme. So, for example, if an employer had made three claims prior to 1 July, for 12, 24 and 20 employees, the maximum number they could claim for in any claim period following 1 July would be 24, as this is the largest previous claim.

31 July

  • 31 July is the last day that employers to submit claims for staff furloughed before 30 June.

1 August

  • From 1 August 2020, the level of grant contributed by the government will be reduced each month until the scheme ends in October.
  • For August, the government will pay 80 per cent of wages up to a cap of £2,500 for the hours an employee is on furlough.
  • Employers now pay National Insurance Contributions (NICs) and pension contributions for the hours the employee is on furlough.

1 September

  • For September, the government will pay 70 per cent of wages up to a cap of £2,187.50 for the hours the employee is on furlough.
  • Employers now top up 10 per cent of an employee's wages (to ensure they receive 80 per cent of their wages up to a cap of £2,500) for the time they are furloughed. 
  • Employers also pay National Insurance Contributions (NICs) and pension contributions for the hours the employee is on furlough.

1 October

  • For October, the government will pay 60 per cent of wages up to a cap of £1,875 for the hours the employee is on furlough.
  • Employers now top up 20 per cent of an employee's wages (to ensure they receive 80 per cent of their wages up to a cap of £2,500) for the time they are furloughed.
  • Employers also pay National Insurance Contributions (NICs) and pension contributions for the hours the employee is on furlough.

31 October

  • The Coronavirus Job Retention Scheme will close on 31 October 2020.

Changes to Contributions

  • June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
  • August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
  • September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
  • October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

Eligibility

Any business with a UK payroll can apply, including charities, recruitment agencies and public sector organisations, as long as:

  • they have created and started a PAYE scheme after 19 March 2020
  • they are enrolled in PAYE online
  • they have a UK bank account

Claims can be made for any employee or apprentice on any kind of contract, as long as they were on the payroll on or before 19 March 2020. Any employee hired after this date cannot be furloughed. 

If your employee is on unpaid leave, If an employee started unpaid leave after 28 February 2020, you can furlough them and can claim their wages through the scheme.

If an employee is sick or self-shielding, if they are sick they will be eligible for Statutory Sick pay (costs for two weeks can be claimed back by the employer) after their sick leave they can be furloughed and paid for through the scheme. If they are self shielding, they can be furloughed and claimed for through the scheme.

Employees can volunteer or undertake training while furloughed, as long as the training does not generate income for the business. 

If you made employees redundant or they stopped working for you after 28 February, you can re-employ them, put them on furlough and claim for their wages through the scheme.

This applies to employees that were made redundant or stopped working for you after 28 February, even if you do not re-employ them until after 19 March. This applies as long as the employee was on your payroll as at 28 February and had been notified to HMRC on an RTI submission on or before 28 February 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 28 February 2020.

Company Directors

As office-holders, salaried company directors are eligible to be furloughed and receive support through this scheme. Company directors owe duties to their company which are set out in the Companies Act 2006. Where a company (acting through its board of directors) considers that it is in compliance with the statutory duties of one or more of its individual salaried directors, the board can decide that such directors should be furloughed. Where one or more individual directors’ furlough is so decided by the board, this should be formally adopted as a decision of the company, noted in the company records and communicated in writing to the director(s) concerned.

Salaried Members of Limited Liability Partnerships (LLPs)

Members of LLPs who are designated as employees for tax purposes (‘salaried members’) under the Income Tax (Trading and Other Income) Act (ITTOIA) 2005 are eligible to be furloughed and receive support through this scheme.

Employer National Insurance and Pension Contributions

You’ll still need to pay employer National Insurance and pension contributions on behalf of your furloughed employees, and you can claim for these too.

You cannot claim for:

  • additional National Insurance or pension contributions you make because you chose to top up your employee’s salary
  • any pension contributions you make that are above the mandatory employer contribution

Past Overtime, Fees, Commission, Bonuses and non-cash payments

You can claim for any regular payments you are obliged to pay your employees. This includes wages, past overtime, fees and compulsory commission payments. However, discretionary bonus (including tips) and commission payments and non-cash payments should be excluded.

Employee taxes

Employees will still pay the taxes they normally pay out of their wages. Including pension contributions (both employer contributions and automatic contributions from the employee), unless the employee has opted out or stopped saving into their pension.

Before you Claim

You will need the following before making a claim:

1) A Government Gateway (GG) ID and password – if you don’t already have a GG account, you can apply for one online.
2) Be enrolled for PAYE online – if you aren’t registered yet, you can enrol online.

What to Include when Calculating Wages

The amount you should use when calculating 80% of your employees' wages is regular payments you are obliged to make, including:

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

You cannot include the following when calculating wages:

  • payments made at the discretion of the employer or a client - where the employer or client was under no contractual obligation to pay, including:
    • any tips, 
    • discretionary bonuses
    • discretionary commission payments
  • non-cash payments
  • non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay

Find out more on how to calculate 80% of wages

Making a Claim

The scheme is open for claims. You will receive payment six working days after making an application.

Employers should agree changes with employees and changes to employment contracts, formally in writing. Not all employees need to be placed on furlough if your business is still operating. A furloughed employee can not undertake any work for the employer. 

Employers can claim 80% of employees wages, including National Insurance Contributions and and automatic pension contributions.

Employers can top up a salary should they wish. 

To make a claim, employers will need:

  • ePAYE reference number
  • Your Self-Assessment UTR (Unique Tax Reference), Company UTR or CRN (Company Registration Number)
  • the number of employees being furloughed
  • the claim period (start and end date)
  • amount claimed (per the minimum length of furloughing of 3 consecutive weeks)
  • bank account number and sort code
  • company contact name
  • company phone number

The following information is required for each employee:

  • Name
  • National Insurance number
  • The total furlough period
  • The total amount being claimed

If you have fewer than 100 furloughed staff – you will need to input information directly into the system for each employee.

Claims for 100 or more staff

If you’re claiming on or after 1 July 2020 for 100 or more employees, you’ll need to upload a file. A template is available for you to fill in. 

Employers will need to calculate the amount they are claiming. HMRC will retain the right to retrospectively audit all aspects of a claim. Claims can be backdated to 1 March 2020.

Read HMRC Guide on how to calculate how much you claim

After you've Claimed

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, no fees can be charged from the money that is granted.

If you make an error when claiming

If you have made an error in a claim that means you’ve received too much, you must pay this back to HMRC. You can either:

  • tell HMRC as part of your next online claim (your new claim will be reduced and you’ll need to keep a record of the adjustment for 6 years)
  • contact HMRC to pay the money back (you should only do this if you’re not submitting another claim)

If you’ve overclaimed a grant and have not repaid it, you must notify HMRC by the latest of either:

  • 90 days after the date you received the grant you were not entitled to
  • 90 days after the date you received the grant that you were not longer entitled to keep because your circumstances changed
  • 20 October 2020

If you are making another claim then you can tell HMRC about an over claimed amount as part of this. When you make your next claim you will be asked whether you need to reduce the amount to take account of a previous over claim. Your new claim amount will be reduced to reflect the over claimed amount and you should keep a record of this adjustment for 6 years.

If you have not claimed enough

If you have made an error that has resulted in receiving too little money, you will still need to ensure you pay your employees the correct amount. You should contact HMRC to amend your claim. As you are increasing the amount of your claim, we may need to conduct additional checks.

You are no longer be able to amend a claim relating to the period up to 30 June to add an employee that should have been included on a claim submitted before that date. You must make sure that any remaining claims still to be made for the period to 30 June include all of your eligible employees. Amendments for any other errors you made that resulted in you not claiming enough will still be permitted.

Read more about paying a grant back

When the government ends the scheme

When the government ends the scheme, you must make a decision, depending on your circumstances, as to whether employees can return to their duties. If not, it may be necessary to consider termination of employment (redundancy).

HMRC will process all claims made before the scheme ends.

Contact HMRC

Do not contact HMRC unless it has been more than 10 working days since you made the claim and you have not received it in that time.

If you need to contact HMRC after 10 working days, you can call 0800 024 1222 or you can chat online with an advisor.

Contact HMRC about the CJR Scheme

Coronavirus Business Advice and Support

The AND business team is here to support you.

For further information or if you need help and advice, please get in touch via email or telephone 028 9147 3788