News and Events

Out with the Job Support Scheme in with the Job Retention Scheme

View profile for Chloe Pereira
  • Posted
  • Author
Key changes to the Coronavirus Job Retention Scheme - 29 May 2020

Confused? Head spinning? Us too. Forget what we told you last month about government support: the new Job Support Scheme never happened and is on hold until further notice, and the Job Retention Bonus has also been indefinitely delayed.

The Coronavirus Job Retention Scheme, known to most as the ‘furlough scheme’, is back. Just days before the Job Support Scheme was due to replace the furlough scheme, the government performed a u-turn and, at the same time as announcing a second lockdown, also informed us that the furlough scheme would be extended until December 2020.

Then, just in case we were in danger of resting on our laurels, just a few days later Rishi Sunak announced that the furlough scheme would be extended until March 2021.

Extended Job Support Scheme

The government published a policy paper on 5 November about the extension, which we summarised here.

On 10 November, the government updated 11 separate online pages of guidance, which set out operation of the scheme from 1 November to 31 January 2021.  The document which sets out the legal framework for the scheme, the Treasury Direction, was then published in its 5th iteration on 13 November.

The points in the policy paper remain applicable, but the guidance, and Treasury Direction, add further detail and clarity. We have set out key additional points arising from the guidance pages below, along with the links to each page:

Check if you can claim for wages through the CJRS

  • You can furlough employees and claim under the scheme if your operations have been affected by Coronavirus
  • Employers can continue to claim for furlough periods ending on or before 31 October until 30 November 2020. The previous rules will apply to those claims (e.g. relating to the proportion of employer contribution)
  • HMRC will check claims and payments can be withheld, or demand made for repayment, if a claim is fraudulent or based on incorrect information
  • CJRS grants are not classed as state aid
  • Claims covering 1 November onwards are only valid for those employed and on payroll on 30 October 2020 but there is no limit on the number of employees you can claim for, i.e. it doesn’t matter how many, if any, employees you previously furloughed
  • If staff costs are publicly funded, staff should not be furloughed using the scheme
  • Administrators can use the scheme but only if there is a reasonable likelihood of retaining the workers
  • To be eligible for the grant employers must have confirmed to employees in writing (or reached collective agreement with a trade union) that they have been furloughed and:
    • Make sure the agreement is consistent with your legal obligations to employees
    • Keep written record of the agreement for 5 years
    • Keep records of how many hours employees spend at work and not working
  • During furloughed hours employees cannot undertake any work that makes money for or provides services to your organisation. They are permitted however to take part in training, and volunteer or work elsewhere. If taking part in training, employers must ensure that the furlough pay covers at least National Minimum Wage, and top up if it doesn’t
  • If furloughed employees do join a new employer, that new employer must ensure they complete the HMRC Starter Checklistavailable online and complete ‘statement C’
  • You can claim for an employee serving a statutory notice period, but you can’t use the grant to fund statutory redundancy pay
  • You can agree to vary an employee’s holiday entitlement but it can’t fall below the statutory minimum of 5.6 weeks per year
  • Employees can take holiday while on furlough and, if they are flexibly furloughed, any holiday taken is counted as furloughed rather than working hours (important for your record keeping purposes)
  • Employees mustn’t be placed on furlough just because they are on holiday but if a furloughed employee does take holiday, pay must be topped up by the employer to their normal pay
  • HMRC will publish, for companies and LLPs using the scheme from that point onwards, their name, registered number and an indication of the value of the claim (further guidance on what exactly this means to follow late November)

Check if you can claim here

Check which employees you can put on furlough

  • You can claim for employees on any type of employment contract, including full-time, part-time, agency, flexible or zero-hour contracts
  • Foreign nationals are eligible to be furloughed. Grants under the scheme are not counted as ‘access to public funds’, and you can furlough employees on all categories of visa
  • If a Fixed Term employee’s contract has not already expired beyond 1 November, you can extend or renew it and furlough them, provided they were employed on or before 30 October
  • If a Fixed Term employee’s contract expired after 23 September, they can be re-employed and claimed for as long as the other relevant eligibility criteria are met
  • Apprentices can be furloughed and continue to train while on furlough, bearing in mind pay must be at least National Minimum Wage taking into account they time they spend training so the employer may be required to top up the grant
  • From 1 November, a new employer can claim for an employee TUPE’d across provided TUPE or PAYE business succession rules apply and the employee  was employed by their previous employer on or before 30 October and transferred to their new employer on or before* 1 September 2020 (*HMRC have confirmed this word is an error and should read AFTER)
  • Employees can be furloughed by more than one employer, or be furloughed by one employer and continue working for another BUT if an employee had multiple employers over the last year, but only one at a time, and is furloughed by their current employer they should not be re-employed by a former employer and furloughed
  • The government is reviewing whether employers should be eligible to claim for employees serving contractual or statutory notice periods and will change the approach for claim periods starting on or after 1 December 2020, with further due late November.
  • Employees whose employment terminated on or after 23 September can be re-employed and placed on furlough provided they were included in an RTI submission to HMRC between 20 March and 23 September 2020
  • Employees who want to cut short maternity leave to be furloughed must give at least 8 weeks’ notice of their return and you will not be able to furlough them until that 8 weeks ends
  • You can claim for virtually any type of worker/employee as long as they’re paid via PAYE, e.g. agency workers, contractors in scope of IR35 rules, limb (b) workers and office holders

Check who you can put on furlough

Steps to take before calculating your claim

  • Decide the length of your claim period: It starts when your first employee is furloughed, even if others were furloughed after but still in the same claim period
  • When claiming for employees who are flexibly furloughed you should not claim until you are sure of the exact number of hours they will have worked during the claim period. 
  • If you claim in advance and your employee works for more hours than you have told HMRC about, then you will have to pay some of the grant back
  • Payment of the grant is made 6 working days after you make your claim
  • Determine what to include when calculating wages: For example, don’t include discretionary payments
  • Work out your employee’s usual hours and furloughed hours if you are flexibly furloughing them at any time during the claim period

Calculate your claim here

Calculate how much you can claim

  • Make sure you refer to the correct section of the guidance depending on your claim period. Claims for periods up to and including 31 October can be submitted up to and including 30 November
  • Use the calculator on this page for most furlough situations (some exceptions being employees who have TUPE’d or returned from family related leave)
  • Methods of calculation depend on the claim period, and the way your employee is paid – it’s the employer’s responsibility to the check the amount being claimed is correct
  • A ‘furlough day’ is every day an employee was either fully furloughed or ‘under a flexible furlough agreement’

Calculate how much you can claim here

Claim for wages

  • Claims for periods starting on 1 November can be submitted from 11 November and must be submitted by 11.59pm 14 calendar days after the month you’re claiming for (or the next working day if this falls on a weekend, which it will in February and March 2021)
  • You must keep copies of records relating to your claims for 6 years

Claim for your wages here

Additional links


Examples of how to calculate employees’ wages, NI and pension contributions

Examples of calculations for flexibly furloughed employees

How to pay back grant money which has been over claimed, or you’ve decided is not needed

Further guidance on other types of employees you can claim for

Reporting wages in PAYE RTI to HMRC when you’ve claimed under the furlough scheme

Guidance for employees on whether their employer can use the furlough scheme

5th Treasury Direction covering operation of the CJRS from 1 November to 31 January


Potential sticky wickets

With a policy paper, treasury directions and guidance on the furlough scheme all written at speed and various stages in the government’s development and announcement of policy, we are left with several areas of uncertainty.

What written agreement/documentation do you need to have in place with employees? Can you rely on what you already have in place if you have furloughed employees previously? 

Most employment lawyers will advise you to enter into a new written agreement with employees which sets out the exact number of hours they are required to work and be furloughed (as applicable) and for what period. That is certainly a risk minimising, belt and braces approach.

In practice that isn’t necessarily workable or a commercial approach for all employers - for example, if you need flexibility to alter working patterns and/or rotate staff. Surely the scheme anticipates the need for flexibility? The guidance states that employers must have confirmed to employees that they have been furloughed, and the employee doesn’t have to provide a written response. Conversely, the guidance also refers to making sure that the agreement is consistent with employment laws, and that to flexibly furlough employees you’ll need to agree this with employees, keep a new written agreement that confirms the new furlough arrangement and that employees can enter into a flexible furlough agreement more than once.

Ultimately its important to consider the documentation you already have in place in the context of the updated guidance, and keep accurate records of the hours staff in fact work and spend on furlough. If you have never flexibly furloughed employees, it is likely you will at the very least need to confirm to them in writing their flexible working arrangements. In some cases you may need to seek new agreement.

Can you furlough employees who TUPE in to you? 

You can, but the guidance published on 10 November stated only if they TUPE’d to your business on or before 1 September 2020 and they were employed by their previous employer on or before 30 October 2020. This made little sense and appeared to be a drafting error. We tweeted HMRC who confirmed it was an error, and should have stated “after” 1 September. The guidance has since been corrected and the new Treasury Direction reflect the corrected position. Provided the employee was employed by their previous employer on OR before 30 October AND transferred to the new employer on or AFTER 1 September, they can be furloughed under the extended scheme. 

Can you furlough employees serving a notice period? 

Currently, yes. When first published the guidance wording suggested that employers could only claim for statutory notice i.e. not for any excess contractual notice. We tweeted HMRC about this and they clarified that employers can currently claim for both statutory AND contractual notice. However, not only did the government update the guidance to clarify this, but they have also now confirmed that the grant cannot be claim for any contractual or statutory period of notice which covers 1 December onwards. This means that even if you place an employee on notice prior to 1 December, for any period of their notice which runs over, you cannot claim the CJRS grant. They expect to publish further guidance later this month. We’ve considered the potential implications of this in a separate opinion article, which you can read here.

How long must you retain copy records for? 

1.In some places the guidance refers to keeping records for 5 years, in other places, 6 years. Of course its safest to go with the longest period and keep records for 6 years covering all information relating to furloughing employees, including:

  1. Amount claimed and period for each employee
  2. Claim reference numbers
  3. Your calculations
  4. For flexibly furloughed employees, the usual hours worked plus calculations AND the actual hours worked
  5. Written agreements/notifications to employees relating to furlough and flexible furlough

What next?

The government is going to review the extended scheme in January, and decide whether employers should be asked to contribute more. 

Ahead of that, we expect further guidance to be published in late November, which will explain further what information about the value of an employer’s CJRS claim will be published by HMRC.

For advice and support on furlough agreements and using the furlough scheme call us now for a friendly chat about your needs.