Coronavirus Job Retention Scheme: what you need to know

The Chancellor announced in the Spring Budget that the Coronavirus Job Retention Scheme (CJRS) has been extended to 30 September 2021.

Under the CJRS, all UK employers with a PAYE scheme can access support to continue paying part of their employees’ salary for those who have been asked to stop working, but who are being kept on the payroll, otherwise described as ‘furloughed workers’.

All UK-wide employers with a PAYE scheme are eligible: this includes the public sector, Local Authorities and Charities.

How it works

Employers can furlough (wholly or partly) their staff and reclaim a percentage of their usual pay for hours they did not work in the pay period. This is currently 80%, up to a £2,500/month cap, but is due to be reduced from 1 July (see ‘key dates’ section below).

The employer is required to pay employer pension and employer National Insurance costs without reimbursement, in addition to an employee’s pay for worked hours.

Employees are not required to have been on a CJRS claim previously. Similarly, employers who have never claimed before are also eligible. Employees can take on another job whilst furloughed, subject to the terms of their existing employment contract.

Furloughed employees can take annual leave, but you must pay them 100% of their wage in line with working time regulations that govern how much holiday pay they are due. If you want employees to use up accrued and unused holiday, you must give them notice of at least double the time you want them to take. Employment rights are unaffected whilst furloughed.

The government have reiterated the need to communicate furlough in writing to employees. This evidence must be kept for a period of 5 years.

Flexible furloughing

Flexible furloughing provides the option to furlough employees for part of their usual hours. For example, instead of an employee working their usual eight hours a day, they could work six hours and then be furloughed for the remaining two hours. Where an employee works on this flexible basis, the CJRS can still be used for the employee’s normal hours they do not work.

There is no minimum furlough period and agreed flexible furlough agreements can last any amount of time. In addition, employees can enter into a flexible furlough agreement more than once.


Nick normally works a 40 hour week and is paid £2,000 per month.

His current furlough pay = £2,000 x 80% = £1,600 per month

From 1 April, Nick returns on a part-time basis, working 2 days, or 16 hours per week.

  • Nick’s employer pays = 16/40 x £2,000 = £800 per month
  • The CJRS pays = 24/40 x £2,000 x 80% = £960 per month
  • Nick will now receive a total of £1,760 per month.

You can find out more information on how to work out your employee’s ‘normal hours’ here.

Key dates

Until 30 June 2021, you can claim 80% of an employees’ usual salary for hours not worked, up to the £2,500 monthly cap. From 1 July 2021, the level of grant will be reduced each month.

Here are the key dates you need to be aware of:

  • Up to 30 April 2021 – you can claim for employees who were employed on 30 October 2020, where you have made a PAYE Real Time Information (RTI) submission to HMRC between the 20 March 2020 and 30 October 2020.
  • From 1 May 2021 – you can claim for employees who were employed on 2 March 2021, where you have made a PAYE RTI submission to HMRC between 20 March 2020 and 2 March 2021.
  • From 1 July 2021 – the level of grant will be reduced, and you will be required to contribute towards the cost of your furloughed employees’ wages. The employee still receives 80% for hours not worked (up to £2,500/month) but the Government will contribute 70% of wages, up to £2,187.50.
  • From 1 August 2021 as above, but the Government will contribute 60% of wages, up to £1,875.
  • 30 September 2021 the CJRS is due to end.

Making a claim

Claims must be submitted by 11.59pm 14 calendar days after the month you are claiming for. For example, a claim for furlough days in March 2021 needs to be submitted by 14 April 2021. If this date falls on the weekend or a bank holiday, then claims should be submitted by the next working day.

Remember to keep any records that support the amount of CJRS grant you claim, in case HMRC needs to check them. You can view, print, or download copies of your previously submitted claims by logging onto your CJRS service on GOV‌.UK.

HMRC have reiterated that it is important to provide the correct data they need to process your claim, otherwise your payment may be delayed.

You can either make a claim yourself through the Government Gateway or if you use an agent who is authorised to do PAYE online, they can claim on your behalf. You can check which employees you can put on furlough and calculate how much you can claim on the website.

If we are not already preparing claims on your behalf and you require assistance with this, please get in touch with your usual Carpenter Box contact or email our dedicated CJRS team at

Incorrect claims

If you think you have unintentionally claimed too much for a CJRS claim, you can let HMRC know as part of your next online claim. If you have made an error and do not plan to submit further claims, or you have claimed less than you are entitled, you can contact HMRC directly to resolve the issue.

To increase the amount of your claim you will need to amend the claim within 28 calendar days after the month the claim relates to (if this falls on a weekend or a bank holiday, it would then be the next working day). For example, for March 2021 claims, you will need to amend it by 11.59 on 28 April 2021.

HMRC are contacting a number of employers to check that they have claimed the correct amount and are prosecuting those who are fraudulently using the scheme.

Can Directors benefit?

Company directors can be furloughed (wholly or partly) just like other employees. In the event the company (or rather the directors of the company acting as a board) decides to furlough one or more directors, this will need to be recorded in the company’s official records. The decision should also be formally recorded in writing to the director in question.

Whilst furloughed, a director cannot perform the normal responsibilities of their ‘job’ in the company. They cannot conduct any revenue generating activities or provide any services to the company. They can however fulfil the statutory obligations they owe to the company as required under the Companies Act. This is however qualified that they may not do any more than would reasonably judge necessary for that purpose. This could prove practically difficult for directors of some companies. If furloughed, a director will not be able to take customer calls, liaise with suppliers or plan marketing efforts, etc.

In some cases, in may be that such responsibilities are undertaken by a remaining director. In the case of companies with a sole director being furloughed, this would effectively result in that business being closed for the furlough period. You can also opt to flexi furlough a Director so that they can undertake some revenue-generating activities.

The amount that can be claimed under the scheme only applies to salary under PAYE, dividends are not taken into account. So, whilst the CJRS can be of benefit to directors of owned-managed companies, the benefit will be somewhat limited.

Many owned-managed companies will pay directors a small salary under PAYE, therefore the amount that can be claimed may be quite small. Many small companies may also find practical difficulties in furloughed directors not being able to undertake their normal daily responsibilities.

For more information on the Coronavirus Job Retention Scheme, get in touch with a member of our team on 01903 234094.