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Coronavirus Job Retention Scheme – Guide for Employers

Posted by Jake Smith on Sep 24th, 2020 | Get paid

Coronavirus Job Retention Scheme - Guide For Employers | Crunch - image of closed sign

HMRC launched its online claim service and portal for the Coronavirus Job Retention Scheme on 20‌‌th April 2020. Although the scheme is now closed for any new claims, employers can continue to make existing claims or make fresh claims for employees who have previously been furloughed.

At launch, the scheme was planned to run for four months from 1st March to 30th June 2020. On 12th May the Chancellor Rishi Sunak announced a four-month extension to the 31st October 2020.

The scheme rules were changed on 1st July 2020 and the scheme was closed to new entrants on 30th June 2020. You can read more about the changes to the furlough scheme later in this guide.

The government has announced that the last day for making or amending any existing claims for Coronavirus Job Retention Scheme (CJRS) will be 30th November 2020. This covers claims for periods ending on or before 31st October 2020. After 30th November you will not be able to submit any further claims or add to existing claims.

On 24th September 2020, the government announced a new Job Support Scheme to replace the outgoing Coronavirus Job Retention Scheme (CJRS). The new scheme will be introduced from 1st November 2020 and is designed to protect viable jobs in businesses who are facing lower demand over the winter months due to Covid-19.

The new scheme is not a direct replacement for the CJRS. Employers will continue to pay an employee for time worked, but the costs of hours not worked will be split between the employer and the government (through wage support) and the employee (through a wage reduction). Importantly, the employee will keep their job.

Crunch has prepared a guide with more information about the Job Support Scheme, who is eligible and with worked examples of the financial impact on employers and employees.

To make a claim you must be registered with HMRC for PAYE online. If you aren’t registered yet, you can do so now online, or by going to GOV.UK and searching for ‘PAYE Online for employers’. Full instructions on how to register for PAYE online are at the end of this article.

Please note, the only way to make a claim is online using HMRC’s portal. To avoid delays we strongly recommend you submit claims yourself.

If you do not finish your claim in one online session, you can save a draft. You must complete your claim within seven days of starting it.

We recommend you refer to HMRC’s guidance on how to work out 80% of your employees’ wages to claim and its online calculator to help calculate your claim amount.

We also recommend you make a claim every month the scheme is operational. In the first phase of the scheme for furlough periods up to 30th June 2020, employers submitted one claim at least every three weeks (as three weeks was the minimum length of time an employee can be furloughed for under the old rules). Employers had until 31st July to make any claims in respect of the period until 30th June.

On 1st July the scheme rules changed. This guide provides information about the changes and how to claim.

Under the new rules, from 1st August, employers have to make a contribution to an employee’s furlough wages. From 1st July employees can also work on a part-time basis (known as ‘flexible furloughing) for part of the furlough period. It’s easiest to make claims monthly, but employers must report and claim for at least a minimum period of a week.

You cannot make more than one claim during a claim period – HMRC recommend that you make your claim shortly before or at the time of running your company payroll. You must claim for all employees in each period at the same time as you cannot make changes to a submitted claim.

HMRC has published a step by step guide we have used as part of this guide. We have also gone through the process of submitting a claim and have screenshots from the process available in our CJRS Walkthrough guide (pdf download).

The service is simple to use and any support you need is available on GOV.UK – this includes help with calculating the amount you can claim (see the links above).

The service is designed to be ‘self-serve’ and HMRC has said claims will be paid within six working days. If you need Crunch to submit your claim, we won’t be able to submit a claim as quickly as you can yourself.

If you would like to Crunch to make a submission on your behalf, we are able to do this for our accountancy clients, please speak to your client managers. While you will need to pay for the service, we can assure you our fees are among the lowest across UK Accountancy Practices.

To avoid delays, we strongly recommend you submit your claims yourself.

When you submit a claim, HMRC will not acknowledge this by email. You must make a note of the claim reference number provided on screen or print the confirmation screen.

HMRC cannot answer any queries from your employees – they will need to raise these with you, as their employer, directly.

This guide provides all the information you will need and instructions on how to make a claim.

Please note the guide will be updated as more information is published by HMRC.

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The Coronavirus Job Retention Scheme (CJRS) allows UK employers to furlough employees and apply for a grant from the government covering up to 80% of the affected employees’ usual monthly wage costs up to a maximum of £2,500 (per month). Since 31st July the scheme no longer covers the employer’s National Insurance costs and the cost of the minimum pension auto-enrolment contributions that the employer usually makes to their employee’s pension.

To be eligible for CJRS an employer must agree with the employee that they are a ‘furloughed worker’. In addition:

  • Employees must be notified that they have been furloughed
  • Until 1st July employees must be furloughed for a minimum of three consecutive weeks. After 1st July, the minimum period does not apply.
  • Until 1st July the employee cannot do any work for the employer that has furloughed them. After 1st July, the government will allow ‘flexible furloughing’.

The current scheme is due to run until the end of June 2020 and claims can be backdated to start from 1st March 2020. The deadline for submitting backdated claims form 1st March to 30th June was 31st July 2020. The scheme will continue to run until 31st October 2020 in an amended format.

From 1st July the scheme rules were changed. The CJRS has been made more flexible to enable employers to bring previously furloughed employees back to work part-time and still receive a grant for the time when they are not working. This is known as ‘flexible furloughing’ (see changes to the CJRS from 1st July).

From 1‌‌st August, employers had to start contributing to the wage costs of their furloughed staff. The amount employers must contribute to an employee’s wages increases further in September and October. (See employers must start to contribute to furlough payments from 1st August).

Most Crunch clients file their Real Time Information (RTI) with HMRC through their Crunch account each month, and will need to follow the instructions in this guide to apply for the grant available from the government.

We recommend you make a claim every month the scheme is operational.

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The scheme closed to new entrants on 30‌‌th June. This means that the final date by which an employer needed to agree with their employee and ensure they place them on furlough was 10th June. Employers had until 31st July to make any claims in respect of the period 1st March to 30th June.

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Any UK employer can claim, but they must have:

  • created and started a PAYE payroll scheme on or before 19th March 2020
  • enrolled for PAYE online
  • a UK bank account.

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You can claim for employees employed by your company as of 19th March 2020, and who were on your company’s PAYE payroll on or before that date. You must have made an RTI submission notifying HMRC of payments to those employees on or before 19th March 2020.

You can also claim for employees employed between 28th February 2020 and 19th March 2020 who were on your company payroll (i.e. notified to HMRC on an RTI submission on or before 28th February) if you:

  • made them redundant or they stopped working for your company between 28th February and 19th March 2020
  • re-employ them and put them on furlough.

The new rules around the closure of the CJRS scheme mean that you can only claim for any employees you have furloughed if you have:

  • previously furloughed that employee for at least three consecutive weeks between 1st March and 30th June 2020. Employers have until 31st July to make any claims in respect of the period until the end of June.
  • submitted a report under HMRC’s Real Time Information (RTI) reporting system for that employee on or before 19th March 2020

HMRC have published detailed guidance on how to check which employees you can put on furlough to use the CJRS.

For employees that meet the criteria above, the number of employees you claim for in any single claim period starting from 1st July cannot exceed the maximum number of employees you claimed for under any claim ending by 30th June.

For example, if you previously submitted three claims between 1st March and 30th June, in which the total number of employees furloughed in each respective claim was 3, 1 and 5 employees, then the maximum number of employees the employer could furlough in any single claim starting on or after 1st July would be 5 employees.

There are some exceptions explained in further guidance for employees returning from parental leave where this cap may not apply.

From 1st July, employers can bring furloughed employees back to work for any amount of time and any work pattern, while still being able to claim CJRS grant for the hours not worked. From 1st July, only employees that you have successfully claimed a previous grant for will be eligible for more grants under the scheme. This means they must have previously been furloughed for at least three consecutive weeks taking place any time between 1st March and 30th June 2020. Employers have until 31st July to make any claims in respect of the period until the end of June.

For the minimum three consecutive week period to be completed by 30th June, the last day an employee could have started furlough for the first time was 10th June. This may differ if you have an employee returning from statutory parental leave.

If you made employees redundant or they stopped working for you on or after 28th February 2020

If you made employees redundant, or they stopped working for you on or after 28th February 2020, you would have been eligible to re-employ them and put them on furlough as long as you did this by 10th June. You can claim for their wages from the date on which you furloughed them, even if you did not re-employ them until after 19th March 2020.

This applies as long as the employee was on your PAYE payroll as at 28th February 2020, which means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 28th February 2020.

If you made employees redundant or they stopped working for you on or after 19th March 2020

If you made employees redundant, or they stopped working for you on or after 19th March 2020, you would have been eligible to re-employ them and put them on furlough as long as you did this by 10th June. You can claim for their wages through the scheme from the date on which you furloughed them.

This applies as long as the employee was on your PAYE payroll on or before 19th March 2020. This means an RTI submission notifying payment in respect of that employee to HMRC must have been made on or before 19th March 2020.

Every business in the UK will have employees in different circumstances, from employees being made redundant to others returning from maternity leave or those self-isolating because of coronavirus.

We recommend you read HMRC’s guidance carefully before making a claim for an employee.

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If you are a director of a limited company, even if you are the sole director of the company (ie. a personal service company) you can claim your PAYE salary costs up to the maximum of 80% of your average monthly wages (capped at £2,500 per month) plus the other costs highlighted above.

You cannot claim for any income from your company taken by way of dividends.

Your company will need to record its decision to place a director on furlough leave and the affected director cannot generate any income for the company while on furlough leave. The director may take on another job or alternative work (as a sole trader) unrelated to your business.

We have a template letter (Word doc 8Kb) that can be used to send to all employees who are being furloughed along with a template that can be used for a Board meeting minutes (Word doc 8Kb) confirming the decision to furlough directors and/or employees.

You should process your Directors salary and submit your RTI via your Crunch App for your April 2020 salary in the usual way. Our guidance on the tax-efficient salary for a Director in the 2020/21 tax year is up to the National Insurance secondary threshold of £732.33 per month (£8,788 per annum). Please see below (Accounting for the reduced payroll expenses in your Crunch account if you are a sole director/sole employee) on how to update your Crunch account if you decide to reduce your salary amount.

You must calculate your CJRS claim based on the last salary amount you filed with HMRC before 19th March 2020. For a director taking a tax-efficient salary in the 2019/20 tax year, this would usually mean £719 per month. You will not be able to claim based on the higher tax-efficient salary amount for the 2020/21 tax year (£732 per month) you may have chosen to pay yourself after 6th April 2020. See our calculation for limited company directors for further detail.

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The government announced important changes to the CJRS on 29th May. The updated guidance, which was published by the government on 12th June, provides details on how the changes will affect any CJRS claim you make from 1st July. Importantly, from 1st August 2020, your business will be asked to contribute towards the cost of your furloughed employees’ wages.

What you need to do now:

  • Read the information below to see how changes to the scheme impact you, using HMRC’s calculator to understand how much you’ll be able to claim
  • Consider which employees you want to keep on full-time furlough and which employees will come back to work – on what hours – to agree arrangements with them as needed for your business.

What you need to do from July:

  • Start your flexible furloughing of employees from 1‌‌st July onwards. You can decide the hours and shift patterns they work to suit the needs of your business – you’ll pay their wages for the time they’re in work and can apply for a CJRS grant to cover any of their usual hours they are still furloughed for. You can still keep employees on full furlough if you need to
  • Claim for periods ending on or before 30‌‌th June, by 31‌‌st J‌ul‌y – this is the last date you can make those claims
  • Claim for further furlough periods as needed – the first time you will be able to make a claim for days in July will be 1‌‌st July.

From 1‌‌st July 2020, businesses using the scheme can decide to bring previously furloughed employees back to work part-time – with the government continuing to pay 80% of wages for any of their normal hours they do not work until 31st August 2020.

Any working hours arrangement agreed between a business and their employee must cover at least one week and be confirmed to the employee in writing. When claiming the CJRS grant for furloughed hours, they will need to report and claim for a minimum period of a week.

Employers can make claims for longer periods such as monthly or two weekly cycles if preferred. Employers will be required to submit data on the usual hours an employee would be expected to work in a claim period and actual hours worked.

If employees are unable to return to work, or employers do not have work for them to do, they can remain on furlough and the employer can continue to claim the grant for their full hours under the existing rules.

From 1st August 2020, your business will be asked to contribute towards the cost of your furloughed employees’ wages.

The following changes are being made to the amount of government grant available under CJRS from 1st August 2020. The changes mean a gradual reduction in the amount of government available and an increase in the amount employers must contribute.

June and July – no changes The government will continue to pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICs) and pension contributions for the hours the employee doesn’t work – employers will have to pay employees for the hours they work
August The government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed
September The government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500.
October The government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500.

Throughout the above periods, the cap on the furlough grant will be proportional to the hours an employee does not work.

Job Retention Bonus – one-off payment of £1,000

Some details of how jobs will be protected through the government’s new Job Retention Bonus have been announced. Full details on the scheme are due to be published shortly.
Employers will be able to claim a one-off payment of £1,000 for every employee they have previously received a grant for under the Coronavirus Job Retention Scheme (CJRS) and who remains continuously employed until 31st January 2021.

To be eligible, the employee must have received earnings in November, December and January, and must have been paid an average of at least £520 per month, and a total of at least £1,560 across the three months.

Employers will be able to claim the bonus after PAYE information for January 2021 has been filed with HMRC. The bonus will be paid from February 2021. More detailed guidance, including how employers can claim the bonus online will be available by the end of September.

What you need to do now

If you intend to claim the Job Retention Bonus, you must:

  • ensure all employee records are up to date
  • accurately report employees’ details and wages on the Full Payment Submission (FPS) through the Real Time Information (RTI) reporting system
  • make sure all of your CJRS claims have been accurately submitted and you have told HMRC about any changes needed (for example if you’ve received too much or too little).

Before placing an employee on furlough, employers should discuss the reasons for the decision with the individuals involved and make any changes needed to employment contracts with their agreement. Employers may need to seek legal advice on this.

As mentioned above, make sure that you have sent a letter to any furloughed directors or employees (we have a template letter – Word doc 8kB) and that the decision by the board of the company to furlough is recorded (again we have a template that can be used for a Board meeting minutes – Word doc 8Kb).

We have prepared a template flexible furlough letter you can send to affected employees

In the first phase of the scheme, employers submitted one claim at least every three weeks (as three weeks was the minimum length of time an employee can be furloughed for). Employers have until 31st July to make any claims in respect of the period until the end of June.

Under the flexible scheme it is easiest to make claims monthly, but employers must report and claim for at least a minimum period of a week.

To claim, you will need the following information to hand – we recommend you assemble this information before starting a claim.

Information needed to submit a claim Where Crunch clients will find this information
You must have a Government Gateway (GG) ID and password for your company. Please do not confuse this with your personal government gateway ID.

If you don’t already have a GG account for your company, you can apply for one online, or by going to GOV.UK and searching for ‘HMRC services: sign in or register’

Your Government Gateway (GG) user ID will have been provided to you when you set up your GG account. Crunch doesn’t hold this information, so if you don’t have it follow the links underproblems signing in on Gov.uk to access your account.
You must be enrolled for PAYE online.

If you aren’t registered yet, you can do so now, or by going to GOV.UK and searching for ‘PAYE Online for employers’

Your company’s employer PAYE reference number can be found in your Crunch Account: Go to Your Account (top right corner) > Company Profile > PAYE.

If you are not registered for the PAYE online service, you must register as quickly as possible. The most efficient way to do this is to submit the information needed online yourself. Crunch cannot register your company on your behalf

full instructions are provided at the end of this guide to activate this service in your company GG account. Go to the section entitled ‘Activating “PAYE for employers” online’.

You must ensure your company GG account has the address set to your home address in order to receive the necessary activation code.

For each furloughed employee you will be claiming for you must provide the employee:

1. Name

2. National Insurance number

3. Claim period (note 1) and claim amount (see worked examples at the end of this guide)

4. PAYE/employee number (optional)

Employee personal details number 1, 2 and 4 can be found in Your Account (top right corner) > Company Profile > Employees.
Note 1: The earliest date your claim period can commence is 1st March 2020. In the first phase of the scheme, employers submitted one claim at least every three weeks (as three weeks was the minimum length of time an employee can be furloughed for). Employers have until 31 July to make any claims in respect of the period until the end of June. Under the flexible scheme it is easiest to make claims monthly, but employers must report and claim for at least a minimum period of a week.
Your Self Assessment Unique Taxpayer Reference; or Personal to company director and provided by HMRC – Your Limited Company to provide
Your company’s Corporation Tax Unique Taxpayer Reference; or Go to Your Account (top right corner) > Company Profile > Corporation Tax
Company Registration Number Go to Your Account (top right corner) > Company Profile. Your Company Registration Number is stated underneath your company name
Business bank account number and sort code and the company name the bank account is held in Your Limited Company to provide.

If you do not have a business bank account you will need to provide a personal bank account and retain this information to complete your company bank reconciliation.

When completing the application you will also need to confirm the address registered for the bank account you choose to receive payment. This should be your company’s bank account.

Contact name Your Limited Company to provide
Contact phone number Your Limited Company to provide

We strongly recommend you retain all records and calculations in respect of your claims in case HMRC has any questions about your claim.

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The online claim service was launched on GOV.UK on 20‌‌th April 2020 for claims under the first version of the scheme.

The only way to make a claim is online using HMRC’s portal.

We recommend you use HMRC’s online calculator to calculate your claim amount.

In the first phase of the scheme employers submitted one claim at least every three weeks (as three weeks was the minimum length of time an employee can be furloughed for). Employers have until 31st July to make any claims in respect of the period until the end of June.

Under the flexible scheme (post 1st July) it is easiest to make claims monthly, but employers must report and claim for at least a minimum period of a week.

The service should be simple to use and any support you need is available on GOV.UK; this includes help with calculating the amount you can claim.

We recommend you make the claim yourself – the service is designed to be ‘self-serve’ and claims will be paid within six working days. If you ask an Agent like Crunch to submit your claim, they won’t be able to submit a claim as quickly as you can yourself.

HMRC cannot answer any queries from employees – they will need to raise these with you, as their employer, directly.

If you would like Crunch to make a submission on your behalf, we will be able to do this from early May. While you will need to pay for the service, we can assure you our fees will be among the lowest across UK Accountancy Practices. We will publish more details about this in due course.


You can view step-by-step screenshots of an actual claim in our step-by-step CJRS walkthrough

Download the CJRS walkthrough (pdf 1.2Mb) →


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HMRC published information on 12th June to help you make a claim under the new rules. If you’ve previously used the scheme or already worked out how much you can claim, you can continue to claim for wages online.

The steps you will need to take to make a claim under the new rules are shown below:

Step 1: Check if you can claim on CJRS

See above

Step 2: Check which employees you can put on furlough

See above

Step 3: Before calculating your claim

Before you calculate your claim, you will need to:

  • Decide the length of your claim period
  • Know what to include when calculating wages
  • Work out your employee’s usual hours and furloughed hours
  • Based on the above, calculate your claim.

This is a complex calculation and HMRC has published detailed guidance on the steps to take before calculating your claim using the CJRS.

Step 4: Calculate how much you can claim

Before 1st July 2020, employees on furlough cannot undertake any work other than training. From 1st July, employers will:

  • only be able to claim for employees who have previously been furloughed for at least three consecutive weeks taking place any time between 1st March 2020 and 30th June
  • be able to flexibly furlough employees – this means you can bring your employees back to work for any amount of time, and any work pattern
  • still be able to claim the furlough grant for the hours your flexibly furloughed employees do not work, compared to the hours they would normally have worked in that period.

From 1st July, furloughed employees should continue to receive 80% of their wages up to £2,500 per month. However, the amount of grant paid by the government is gradually being reduced, with the employer paying Employer National Insurance Contributions (NICs), auto-enrolment pension contributions and part of the employees’ wages, as shown in the following table.

July August September October
Government pays
Employer NICs and pension contributions Yes No No No
Wages 80% up tp £2,500 80% up tp £2,500 70% up tp £2,500 60% up tp £2,500
Employer pays
Employer NICs and pension contributions No Yes Yes Yes
Wages Nil Nil 10% up to £312.50 20% up to £625
Employee receives 80% per month up to £2,500 per month

Employers can continue to top up employees’ wages above the minimum furlough pay amount but this is not mandatory. Employees must not work or provide any services for the business during hours which they are recorded as being on furlough, even if they receive a top-up wage.

HMRC CJRS calculator

HMRC’s CJRS calculator can currently be used to work out what you can claim for in a claim ending on or before 30th June. It can be used for most employees who are paid either regular or variable amounts each pay period (for example, weekly or monthly).

If you are claiming for an employee who is flexibly furloughed, you will need to work out their usual hours before you use the calculator.

Examples of how to calculate your employees’ wages, National Insurance contributions and pension contributions (for claims up to 30th June)

HMRC has published examples of how to calculate your employees’ wages, National Insurance contributions and pension contributions. We recommend you review HMRC’s guidance to find an example which meets your company’s situation.

Step 5: Claim for your employees’ wages

You’ll need the Government Gateway user ID and password you got when you registered for PAYE online. If you do not finish your claim in one session, you can save a draft. You must complete your claim within seven days of starting it.

Use this link to the HMRC online system to make a claim.

Step 6: Reporting employees’ wages to HMRC when you’ve claimed

If you’ve claimed a grant through CJRS, you should check if you need to report payments on the PAYE Real Time Information system, as this will depend on whether you are using the grant to:

  • pay wages
  • reimburse wages that you’ve already paid.

HMRC has published guidance to follow on reporting employees’ wages to HMRC depending on your situation.

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As highlighted throughout this guide, the CJRS is changing from 1st July 2020.

The final date for submitting a claim covering the period between 1st March and 30th June is 31st July 2020.

Please refer to the guidance in the CJRS from July section for claims covering furlough periods between 1st July and 31st October.

The maximum wage amount you can claim is £2,500 a month, or £576.92 a week, plus any National Insurance and pension contributions you can claim for.

If the length of time you’re claiming for is not a full week or one month, you’ll need to use the daily maximum wage amounts to work out the maximum amount you can claim for each employee.

To work out the maximum amount you can claim, multiply the daily maximum wage amount by the number of days your employee is furloughed for in your claim. The daily maximum wage amount for the four-month period of the CJRS is:

  • March 2020 – £80.65 per day
  • April 2020 – £83.34 per day
  • May 2020 – £80.65 per day
  • June 2020 – £83.34 per day

If your employee is furloughed over two calendar months, you’ll need to calculate the maximum amount for each calendar month and add them together.

If you’re claiming for multiple pay periods in one claim, you can calculate the total maximum using a mixture of:

  • the daily maximum wage amount
  • the weekly maximum wage amount
  • the monthly maximum wage amount

HMRC has an online calculator you can use to help you submit a claim. We recommend you use the calculator when you have assembled all the information you need to make a claim, as highlighted in the previous section.

HMRC has provided step by step guidance using the following example on how to calculate the amount of your claim. You need to calculate the amount of grant you can claim for:

  • Gross salary
  • Employer National Insurance contributions
  • Minimum Pension Contributions.

Calculating the grant for gross salary

The employee is paid a regular, fixed monthly salary on the last day of each month. They are also auto-enrolled into the workplace pension. The employee agreed to be placed on furlough from 21st March 2020, at 80% of their salary.

The employee was paid £2,400 in gross salary for the month of February 2020. This was the last full monthly pay period before 19th March 2020.

The relevant information for the purposes of the claim for salary is:

  • Furlough start date of 21st March 2020
  • Gross salary of £2,400.

The period of the claim in March is 21st to 31st March – this is 11 days.
The daily salary in March is £2,400 / 31 days = £77.42
The period of the claim in March is 11 days – multiply by the daily rate:

  • 11 x £77.42 = £851.62.

Your limited company, as the employer, can claim 80% of this amount.

  • 80% of £851.62 = £681.30.

You need to compare this to the maximum amount available under the scheme which is £2,500 per month.
The daily rate in March at the maximum amount is £2,500 / 31 days which is £80.65. The period of furlough is 11 days

  • 11 x £80.65 = £887.15

Your limited company must claim the lower amount – so £681.30 is the value of your claim for salary in March 2020.

Calculating the grant for employer National Insurance contributions (NIC)

Please note that if no employer NIC is due because your company is covered by the Employment Allowance, you cannot claim a grant for Employer NIC and you do not need to complete a calculation.

The employee’s gross pay for March 2020 after adjusting for the receipt of government grant is £2,229.70, calculated as follows.

 

Period Number of days Daily rate Funded by Percentage Calculation £
1st to 20th March 20 £77.42 Employer 100% 20 days x £77.42 1,548.40
21st to 31st March 11 £77.42 Government Grant 80% 11 days x £77.42 x 80% 681.30
Total 31 £2,229.70

The employer NICs due on the total gross pay of £2,229.70 is £208.48. This is calculated as follows. There are some minor roundings.

 

£
Gross Pay 2,229.70
Less Employer monthly NI threshold for 2019/20 tax year (719.00)
Relevant amount for calculation 1510.70
Employer NI is 13.8% of relevant amount 208.48
Amount of NI to be paid 208.48
Daily amount in March (divide £208.48 by 31 days) 6.73
Amount paid by limited company (20 days x £6.73) 134.50
Amount to be claimed as government grant for March 2020 (11 days x £6.73) £74.03

Calculating the grant for employer pension contributions

If the employee is part of a workplace pension, the employer can claim the minimum contribution of 3%. The entitlement to grant is calculated as follows.

The monthly lower level of qualifying earnings is £512 (for March 2020) and it is apportioned based on the number of days in the month and the number of qualifying furlough days:

  • £512 / 31 days (in month) = £16.52 x 11 days (qualifying furlough) = £181.72.

The amount of furlough pay is £681.30 – deduct the lower qualifying earnings of £181.72 and multiply by the minimum contribution of 3%:

  • Furloughed gross pay of £681.30 – £181.72 = £499.58
  • Pay subject to pension contributions: £499.58 x 3% = £14.99.

The limited company can claim £14.99 as grant for employer pension contributions.

Total amount of grant to be claimed

Total amount of grant to be claimed for this employee is £770.32.

£
Gross salary 681.30
Employer National Insurance contribution 74.03
Minimum Pension Contribution 14.99
Total £770.32

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The employee is paid a regular, fixed monthly salary of £2,400 on the last day of each month. They are also auto-enrolled into the workplace pension. The employee agreed to be placed on furlough from 1st of April 2020, at 80% of their salary.

The employee was paid £2,400 in gross salary for the month of February 2020. This was the last full monthly pay period before 19th March 2020.

The relevant information for the purposes of the claim for salary is:

  • Furlough start date of 1st of April 2020
  • Gross salary of £2,400.

The period of the claim in April is 1st to 30th April = a full month

Your limited company, as the employer, can claim 80% of the employee’s monthly salary

  • 80% of £2,400 = £1,920

You need to compare this to the maximum amount available under the scheme which is £2,500 per month.

Your limited company must claim the lower amount: so £1,920 is the value of your claim for salary in April 2020.

Calculating the grant for employer National Insurance contributions (NIC)

Please note that if no employer NIC is due because your company is covered by the Employment Allowance, you cannot claim a grant for Employer NIC and you do not need to complete a calculation.

The employer NICs due on the total gross pay of £1,920 is £163.94. This is calculated as follows. There are some minor roundings.

£
Gross Pay 1,920
Less Employer monthly NI threshold for 2020/21 tax year (732.00)
Relevant amount for calculation 1,188
Employer NI is 13.8% of relevant amount 163.94
Amount to be claimed as government grant for April 2020 £163.94

Calculating the grant for employer pension contributions (if applicable)

If the employee is part of a workplace pension, the employer can claim the minimum contribution of 3%. The entitlement to grant is calculated as follows.

The monthly lower level of qualifying earnings is £520 (for April 2020).

  • Furloughed gross pay of £1,920 minus £520 = £1,400
  • Pay subject to pension contributions: £1,400 x 3% = £42.00

The limited company can claim £42.00 as grant for employer pension contributions.

Total amount of grant to be claimed

Total amount of grant to be claimed for this employee is £2,125.94.

 

£
Gross salary 1,920
Employer National Insurance contribution 163.94
Minimum Pension Contribution 42.00
Total £2,125.94

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The sole director of a personal service company has a PAYE salary set at £8,632 for the 2019/20 tax year and £8,788 for the 2020/21 tax year. Salary is paid monthly on the last day of the month. The director decided the furlough period should commence on 1st March 2020 at 80% of their salary. The furlough decision is recorded by the limited company in a special board motion.

The employee was paid £719 in gross salary for the month of February 2020. This was the last full monthly pay period before 19th March 2020.

The relevant information for the purposes of the claim for salary is:

  • Furlough start date of 1st March 2020
  • Gross salary of £719.

The period of the claim in March is 1st to 31st March – this is 31 days. The full monthly salary is used and the limited company, as the employer, can claim 80% of this amount.

  • 80% of £719 = £575.46

You need to compare this to the maximum amount available under the scheme which is £2,500 per month.

The limited company must claim the lower amount – so £575.46 is the value of the claim for salary in March 2020.

Calculating the grant for employer National Insurance contributions (NIC)

The director salary is paid below the secondary threshold for NI so no amount is payable. The amount of claim is nil.

Calculating the grant for employer pension contributions

If the employee is part of a workplace pension, the employer can claim the minimum contribution of 3%. The entitlement to grant is calculated as follows.

The monthly lower level of qualifying earnings is £512 (for March 2020). The claim is for the full month of March.

The amount of furlough pay is £575.46 – deduct the lower qualifying amount of £181.72 and multiply by the minimum contribution of 3%:

(£575.46 – £512) x 3% = £1.89.

The limited company can claim £1.89 as grant for employer pension contributions.

Total amount of grant to be claimed for this employee is £577.35.

£
Gross salary 575.46
Employer National Insurance contribution 0
Minimum Pension Contribution 1.89
Total £577.35

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Using the methodology highlighted above, we have calculated the amount of grant a limited company may claim based on different salary amounts paid in February 2020. The table also shows the amounts to be included for Employers National Insurance and the minimum employer pension contribution when you make your online claim.

Salary paid in February 2020
£8,632 £12,500 £20,000 £30,000
£ £ £ £
Gross monthly salary 719.33 1,041.67 1,667 2,500
80% of monthly salary £575.46 £833.33 £1,333.33 £2,000
Employer NI 0 £15.78 £84.78 £176.78
Employers pension at 3% £1.89 £9.64 £24.64 £44.64
Total £577.35 £858.75 £1,442.75 £2,221.42

Employees whose pay varies and were employed from 6th April 2019

If the employee has been employed continuously from the start of the 2019/20 tax year (ie. from 6th April 2019 to 5th April 2020) you can claim the highest of either:

  • 80% of the same month’s wages from the previous year (up to a maximum of £2,500 a month)
  • 80% of the average monthly wages for the 2019 to 2020 tax year (up to a maximum of £2,500 a month).

Simply repeat the calculations provided above but start with the amount they earned in the same period last year.

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The income your company receives under the scheme is a grant from the government and must be used to offset the costs of placing employees on furlough leave. The amount of grant income received must be included in the company’s accounts for Income Tax and Corporation Tax purposes. Crunch accountants will check this when we prepare your company’s annual accounts.

For this amount to be included as part of the profit calculations on your Crunch account you will need to record this income as interest received from the banking tab. This will ensure you can accurately calculate the amount of dividends available for your company to distribute. Crunch accountants will then reassign the income to an appropriate income ledger when we prepare your company’s annual accounts.

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If you are the only person employed by your company (usually a sole director) and have set up a recurring payroll in your Crunch account, and you decide to keep paying yourself the same salary, you do not need to adjust the recurring payroll in your Crunch account.

If you decide to reduce your salary to the amount of grant paid by HMRC, you should take the following action to amend your recurring payroll:

Go to tab Pay Yourself > Payroll Runs > Scheduled payroll runs: Click on Options > Edit.

Here you will need to update the Basic salary to the figure calculated based on either 80% of your monthly salary as of 29th February 2020 if you took a fixed amount each month during the 2019/20 tax year. Or, if you paid yourself variable amounts during the 2019/20 tax year you need to update with 80% of the average monthly salary during the 2019/20 tax year.

If you have not set up a recurring payroll in your Crunch account, and update your payroll monthly, simply include the actual amount you pay yourself.

If your company has employees, you will be a Crunch payroll customer and will need to contact the payroll team on support@crunch.co.uk to make the necessary changes to your Crunch account.

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You must log in to your HMRC company government gateway account.

You must ensure your company government gateway account has the address set to your home address in order to receive the necessary activation code:

  1. Scroll down to “Get another tax, duty or scheme” and click on “Find a tax, duty or scheme”
  2. What do you want to add? Choose “Employers or intermediaries, for example PAYE for employers or CIS” and click Continue.
  3. Which employer tax do you want to add? Select “PAYE for Employers” and continue through the prompts to trigger the activation code from HMRC.
  4. “Do you have an employer PAYE reference?” If you have an existing scheme and just need to activate the online account for this, select “Yes.”
  5. Once ‘’Yes’’ is selected, you’ll be asked for your company’s PAYE details – ‘HMRC office number’ (this is the first three digits of your PAYE reference before the slash), ‘Employer PAYE reference’ (the digits after the slash), and ‘Accounts office reference’. Once these are filled in, click “Request access.”Please note, we have had reports that HMRC may not be sending the “Authorisation Codes” that are usually required to access this service. In this instance, you may not need to complete steps 6 and 7.
  6. You’ll be redirected to a page indicating successful submission. HMRC will send an activation code to your address and you should receive this within 10 working days, providing HMRC have the correct PAYE address for you. Ensure the address is your home address.
  7. Once you receive the code, you must log into gateway account and click on the “activate” box next to “PAYE for Employers”, enter the code and click “activate

As highlighted above, the rules surrounding the grant allowed under the CJRS have changed. The scheme closed to new entrants on 30th June and employers will need to make contributions to the amount claimed from 1st August.

We have provided the following examples of the amounts of wages, employer National Insurance Contributions and pension contributions which can be claimed and the amounts employer’s will need to contribute.

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In this example, the employer is making a partial claim for grant for a fixed monthly salaried employee using the following characteristics:

  • The employee has been furloughed since 1st April
  • The monthly fixed wage is £2,400 (£28,800 per annum)
  • The employer wishes to make a claim for the period 1st to 31st July
  • The employee is contracted to work 40 hours per week
  • The employee is commencing flexible furlough on 1st July and will work 23 half days in the month of July. A half day is 4 hours.

Claim for wages for July

Step 1 Calculate the number of contracted hours in the claim period

 

The number of hours the employee was contracted to work on or before 19th March 40 hours per week
Divide by the number of days in the weekly shift pattern – it’s a weekly pattern divide by 7 days
40 hours divided by 7 days 5.72 hours
Multiply by the number of days in the pay period 31 days
5.72 x 31 177.32 hours
Round up to 178 hours is the number of usual hours worked in July 178 hours
Number of contracted hours in the claim period 178 hours

Step 2 Calculate the number of furloughed hours

Employees will work 23 half days between 1st and 31st July
Number of hours usually worked in July (see step 1) 178 hours
The total hours worked is 4 hours x 23 days 92 hours
Number of usual hours less actual hours worked is the number of furlough hours to claim for (178 minus 92) 86 hours
Number of furlough hours 86 hours

Step 3 calculate the maximum wage amount

CJRS maximum furlough pay is £2,500 per month £2,500
Multiply by number of furlough hours 86 hours
Total £215,000
Number of contracted hours in the claim period (see step 1) 178 hours
£215,000 / 178 hours £1,207.87
Maximum wage amount £1,207.87

Step 4 Calculate furlough wages

Employee fixed wage £2,400
CJRS entitlement is 80% of £2,400 £1,920
Calculate furlough pay:
Furlough hours (see step 2) 86 hours
Multiply CJRS entitlement by furlough hours

£1,920 x 86

£165,120
Divide by the number of contracted hours in the claim period (Step 1)

£165,120 / 178 hours

£927.64
Furlough wages amount £927.64

Step 5 Claim lower of maximum grant or furlough wages

Maximum wage amount £1,207.87
Furlough wages amount £927.64

Claim the lower amount of £927.64

Claim for employer National Insurance Contributions (NIC) for July

The monthly earnings threshold for July 2020 £732
Divide by the number of days in pay period

£732 / 31 days

£23.612
Multiply by number of days in the claim

31 days x £23.612

£732
Divide by the number of usual working hours in the claim

£732 / 178 hours

£4.112
Multiply by the number of furlough hours

£4.112 x 86 hours

£353.64
Apportioned threshold for employer NIC £353.64
Furlough wages amount (step 4) £927.64
Less apportioned threshold for employer NIC (above) (£353.64)
Equals £574
Multiple by the employer NIC rate (13.8%)

£574 x 13.8%

£79.21
The amount of grant to be claimed for employer NIC in July £79.21

Claim for pension contribution grant – July

 

Employer pension contribution threshold in July £520
Divide by number of days in pay period (31 days) £16.77
Multiply by number of days in the claim period

£16.77 x 31 days

£520
Divide by number of usual hours in pay period

£520 / 178

£2.92
Multiply by number of furlough hours

£2.9213 x 86 hours

£251.24
Furlough wages amount (step 4) £927.64
Less apportioned amount

£927.64 – £251.24

£676.40
Multiply by 3% (minimum pension contribution by employer)

£676.40 x 3%

£20.29
The amount of grant to be claimed for employer pension contribution in July £20.29

Total CJRS grant to be claimed

 

£
Wages 927.64
Employer National Insurance contribution 79.21
Minimum Pension Contribution 20.29
Total £1027.14

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In this example, the employer is making a full claim for a fixed monthly salaried employee using the following characteristics:

  • The employee has been furloughed since 1st April
  • The employee will not be undertaking any work for the employer in the furlough period so flexible furlough does not apply
  • The monthly fixed wage is £2,400 (£28,800 per annum)
  • The employer is continuing to make claims throughout June and July
  • The employer wishes to calculate the amount of grant they can claim in August, September and October
  • The employee is contracted to work 40 hours per week

Most of the calculations summarised below are highlighted in Example 1 and are not repeated here. Please see Example 1 for the detailed calculations.

 

August September October
Step 1 Calculate the number of contracted hours in the claim period
Note: the total contracted hours will change based on the number of days in the claim period month
Number of days in the claim period month 31 days 30 days 31 days
Number of contracted hours in the claim period – (Contracted hours/7 days in a week) x days in period rounded up) – see Example 1 for methodology 178 hours 172 hours 178 hours
Step 2 Calculate the number of furloughed hours in the claim period
Note: No need to calculate as illustration assumes furlough is full-time and for the full month. Therefore hours will be same as Step 1
Step 3 calculate the maximum wage amount
Note: No need to calculate as illustration assumes furlough for the full month. The maximum claim amount allowed by the government is £2,500 per month.
Step 4 Calculate furlough wages
The employee is furloughed for the entire month, simply multiply the employee’s monthly wages of £2,400 by the relevant monthly CJRS entitlement rate allowed by the government
CJRS entitlement rate allowed by the government 80% 70% 60%
Furlough wages amount to be claimed from the government by the employer £1,920.00 £1,680.00 £1,440.00
Step 5 Claim lower of maximum grant or furlough wages

Note: Lower of Step 3 and Step 4

Amount of grant from the government £1,920.00 £1,680.00 £1,440.00
Contribution from employer 0 £240.00 £480.00
Employee furlough wages at 80% £1,920.00 £1,920.00 £1,920.00
Employer National Insurance Contributions (NICs)
Employer pays employer NICs
Calculated:

(Furlough salary minus relevant NIC earnings threshold) x 13.8%

= (£1,920 – £732) x 13.8%

= £163.94

Employer pays NICs £163.94 £163.94 £163.94
Pension contributions
Employer pays pension contributions
Calculated as:

(Furlough salary minus pension contribution threshold) x 3%

= (£1,920 – £520) x 3%

= £42.00

Employer pays pension contributions £42.00 £42.00 £42.00
Summary
Amount of grant paid by government £1,920.00 £1,680.00 £1,440.00
Monthly costs to be paid by employer:
Wages 0 £240.00 £480.00
Employers NICs £163.94 £163.94 £163.94
Pension contributions £42.00 £42.00 £42.00
Total cost to employer £205.94 £445.94 £685.94
Employee receives furlough wages at 80% £1,920.00 £1,920.00 £1,920.00

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In this example, the employer is making a partial claim for grant for a fixed monthly salaried employee using the following characteristics:

  • The employee has been furloughed since 1st April
  • Full-time furlough ends on 31st July
  • Regular claims have been made monthly and paid by HMRC
  • The monthly fixed wage is £2,400 (£28,800 per annum)
  • The employee is contracted to work 40 hours per week
  • The employee is commencing flexible furlough on 1st August and will work 23 half days in the months August, September and October. A half day is 4 hours.

Most of the calculations summarised below are highlighted in Example 1 and are not repeated here. Please see Example 1 for the detailed calculations.

 

August September October
Step 1 Calculate the number of contracted hours in the claim period
Note: the total contracted hours will change according to the number of days in the claim period month
Number of days in the claim period month 31 days 30 days 31 days
Number of contracted hours in the claim period – (Contracted hours/7 days in a week) x days in period rounded up) 178 hours 172 hours 178 hours
Step 2 Calculate the number of furloughed hours in the claim period
Note: Employee works half days for 23 days every month
Number of hours usually worked in month (see step 1) 178 hours 172 hours 178 hours
The total hours worked is 4 hours x 23 days 92 hours 92 hours 92 hours
Number of furlough hours 86 hours 80 hours 86 hours
Step 3 calculate the maximum wage amount
Calculated as follows: {(CJRS maximum furlough pay (£2,500) x number of furlough hours (Step 2)} / number of contracted hours (Step 1)
Maximum wage amount £1,207.87 £1,162.79 £1,207.87
Step 4 Calculate furlough wages
Calculated as follows: {(CJRS entitlement x number of furlough hours (Step 2)} / number of contracted hours (Step 1)
Employee fixed wage £2,400 £2,400 £2,400
CJRS entitlement rate from the government 80% 70% 60%
CJRS entitlement £1,920.00 £1,680.00 £1,440.00
Furlough wages amount to be claimed from the government by the employer
£1,920 x 86 hours/178 hours (August) £927.64
£1,680 x 80 hours/172 hours (September) £781.40
£1440 x 86 hours/172 hours (October) £695.73
Step 5 Claim lower of maximum wage amount or furlough wages

Note: Lower of Step 3 and Step 4

Furlough wages amount to be claimed from the government by the employer £927.64 £781.40 £695.73
Contribution from employer 0 £111.63 £231.91
Employee furlough wages at 80% £927.64 £893.03 £927.64
Earnings from working half days for 23 days

Calculated as:

(Total hours worked / Number of contracted hours) x £2,400

92 hours / 178 hours x £2,400 (August) £1,240.45
92 hours / 172 hours x £2,400 (September) £1,283.72
92 hours / 178 hours x £2,400 (October) £1,240.45
Total earning of employee £2,168.09 £2,176.75 £2,168.09
National Insurance Contributions (NICs)
Employer must pay employer NICs
Calculated as:

(Total earning of employee (Step 5) minus relevant NIC earnings threshold (£732)) x 13.8%

August = (£2,168.09 – £732) x 13.8% = £198.18

September = (£2,176.75 – £732) x 13.8% = £199.38

October = (£2,168.09 – £732) x 13.8% = £198.18

Employer pays £198.18 £199.38 £198.18
Pension contributions
Employer pays pension contributions
Calculated as:

(Total earning of employee (Step 5) minus minus pension contribution threshold) x 3%

August = (£2,168.09 – £520) x 3% = £49.44

September = (£2,176.75 – £520) x 3% = £49.70

August = (£2,168.09 – £520) x 3% = £49.44

Employer pays £49.44 £49.70 £49.44
Summary
Amount of grant paid by government £927.64 £781.40 £695.73
Costs to be covered by employer:
Furlough contribution from employer 0 £111.63 £231.91
Salary for days worked £1,240.45 £1,283.72 £1,240.45
Employers NI (see below for calculation) £198.18 £199.38 £198.18
Pension contribution (see below for calculation) £49.44 £49.70 £49.44
Total cost to employer £1,488.07 £1,644.43 £1,719.98
Employee receives wages £2,168.09 £2,176.75 £2,168.09

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You can find out about the other support available to businesses on our COVID-19 content Hub.

If you have claimed too much CJRS in error

It’s important that you continue to check each claim is accurate before submitting it, and we would also recommend checking previous claims to avoid any penalties for claiming too much.

If your company has claimed too much CJRS grant and you have not repaid it, you must notify HMRC immediately and repay the money by the latest of whichever date applies below:

  • 90 days from receiving the CJRS money you or your client are not entitled to
  • 90 days from the point circumstances changed so that you or your client were no longer entitled to keep the CJRS grant
  • 20‌‌th October 2020, if on or before 22nd July you or your client received CJRS money you’re not entitled to, or if circumstances changed.

You may have to pay interest and a penalty as well as repaying the excess CJRS grant. For more information on interest, go to ‘Interest rates for late and early payments’ on GOV‌.UK.

How to let HMRC know if you have claimed too much

You can let HMRC know as part of your next online claim without needing to call – the system will prompt you to add details if you have received too much. If you have claimed too much and do not plan to submit further claims, you can let HMRC know and find out how to make a repayment online. Go to Pay Coronavirus Job Retention Scheme grants backon GOV‌.UK.

HMRC understands mistakes happen, particularly in these challenging times, and will not seek out innocent errors and small mistakes for compliance action.

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