What is the Coronavirus Job Retention Scheme?

Definition of Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme (CJRS) is a temporary initiative that allows employers to access financial support to pay part of their employees' wages. The government introduced the initiative to enable employers to retain employees who they may otherwise have been forced to lay off during the Covid-19 pandemic.

On 17th December 2020, the government announced an extension of the Coronavirus Job Retention Scheme until the end of April 2021. Under the extended scheme, employees will receive a minimum of 80% of their current salary for hours not worked.

Employers can reclaim up to 80% of their employees’ wages from the government, up to a maximum of £2,500 per employee per month. Employers will continue to pay National Insurance and pension contributions for the hours the employee does not work.

Employees can either be placed on full-time furlough or they can work some of their normal hours and be furloughed for the remaining hours (this is known as flexible furlough).

The table below shows what employers can claim back under the scheme:

Furlough dates Percentage of wages paid by HMRC Maximum claim amount per employee per month Employer's National Insurance and pension contributions included in the claim?
1st March to 31st July 80% £2,500 Yes
1st to 31st August 80% £2,500 No, employers must pay these
1st to 30th September 70% £2,187.50 No, employers must pay these
1st to 31st October 60% £1,875 No, employers must pay these
1st November 2020 to 30th April 2021 80% £2,500 No, employers must pay these

Employees who are paid through the scheme are classified as ‘furloughed workers’.

Who is eligible for the Coronavirus Job Retention Scheme?

In order to make a claim for months prior to November 2020, businesses must:

  • have created and started a PAYE payroll scheme on or before 19th March 2020
  • have a UK bank account

The employees a business can claim for can be on any type of contract. However they must have received wages from the employer and been included on an RTI submission to HMRC on or before 19th March 2020.

In order to make a claim for a period after 1st November 2020, businesses must:

  • have created and started a PAYE payroll scheme
  • have a UK bank account

The employees a business can claim for can be on any type of contract. However they must have received wages from the employer and been included on an RTI submission to HMRC between 20th March 2020 and 30th October 2020.

There is no maximum number of employees that employers can claim for. Employers are eligible for the November extension regardless of whether they had previously taken advantage of the CJRS. Similarly, employers can use the extension to claim for any eligible employee regardless of whether they had claimed for that employee under the scheme prior to November 2020.

How can I apply for the scheme?

You can now access a portal on HMRC’s website in order to submit a claim. You'll need to know in advance how much you're claiming for each employee. We’ve created a handy furlough claim calculator for monthly payroll to help you work out the numbers you need.

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