What is this?

This is a scheme open to all UK employers with a PAYE scheme aimed at supporting them to continue to pay their employees wages that would have otherwise been laid off due to COVID-19.

What does this cover?

This covers employees who have been asked not to work but kept on the payroll due to the Coronavirus. These employees are called ‘furloughed workers’. The scheme will cover the lower of 80% of their wages or up to £2,500 per month.

Does the employer have to top up the rest of the employee’s wage?

It is up to the employer whether they choose to or not.

What can a furloughed worker do?

Nothing. They cannot undertake any work for or on behalf of the business. This includes services or generating revenue.

When does the scheme start?

It is effective from 1 March 2020 and covers anyone who was employed on or before 19 March 2020 through a PAYE scheme.

How long will the CJRS run for?

At the moment, it will run to 31 October 2020 which new changes in August to allow workers to return to work part time. More details on what this involves have not yet been released (13/05/2020).

What about the associated NI and pension costs?

As well as covering the lower of 80% of the wages or up to £2,500, the associated Employer’s NIC and minimum auto enrolment employer pension contribution will be covered on top.

Can company directors be made furloughed workers?

Yes. If there is no work or contract due to COVID-19, then they can be furloughed. This does not conflict or stop directors carrying out their statutory duties of the company such as filing accounts whilst furloughed.

Can agency workers be furloughed?

Yes, provided that they are paid through PAYE.

What about employees on flexible or zero-hour contracts? Can they be furloughed?

Yes.

What if the employee was made redundant since 28 February 2020?

They can be rehired under these exceptional circumstances and made furloughed workers. They must not, however, do any work etc. as mentioned above.

What if the employee is on reduced pay? Can they be furloughed?

No. If they are on reduced hours or pay, they are not eligible for this scheme.

What if the employee is on unpaid leave? Can they be furloughed?

No, unless they were placed on unpaid leave AFTER 28 February 2020.

What if the employee is on SSP? Can they be furloughed?

Yes. If they are on sick leave or self-isolating then you can make them furloughed workers after. If they are “shielding”, they can be placed on furloughed without delay.

What is the minimum period a worker can be furloughed for?

3 weeks.

What administration is required to make an employee furloughed?

Employers should discuss with their employees the changes that are being made and make any amendments to their contract of employment.

What if the employee has two jobs?

Each employment is separate and so can be furloughed under one employment whilst still working for the other.

What figure should you use to work out the furloughed workers grant?

If the employee has been employed for the full 12 months prior to the claim then you use the higher of either:

• the same month’s earnings from the previous year OR
• average monthly earnings from the 2019-2020 tax year

What if the worker was employed for less than a year? How do you work out the claim?

Claim the average monthly earnings since they started.

What other information is needed to report furloughed workers to HMRC for the grant?

• Bank Account number and sort code where the claim is to be paid
• Name and phone number of a business contact in case HMRC has any queries
• Your Self-Assessment Unique Tax Reference (UTR), Company UTR (Corporation Tax Reference) or Company Registration Number.
• Name, employee number and NI number of each furloughed employee.
• Total amount being claimed for all employees and the total furloughed period.

How do you claim the grant under the CJRS?

You can make a claim here. If you have a government gateway account, you can use your login details to make the claim. Alternatively, if your accountant/agent has authority (and not just RTI filing only authority), they should be able to make the claim on your behalf.

Is the grant treated as income?

Yes. The grant should be recorded as income in the business and offset against the associated wage costs.

If you have any specific questions that have not been answered above, please contact us or leave a comment below.