What is the Coronavirus Job Retention Scheme?

Definition of Coronavirus Job Retention Scheme

The Coronavirus Job Retention Scheme is a temporary initiative that allows employers to access financial support to pay part of their employee's 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.

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

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

Who is eligible for the Coronavirus Job Retention Scheme?

In order to be eligible for the scheme, 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 but must have been on the company payroll on 19th March 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.

If you use FreeAgent’s payroll, you can amend your employee payslip details to include furloughed days. This automatically produces a monthly report in FreeAgent, which contains the details you’ll need for your Coronavirus Job Retention Scheme claim.

If you don’t use FreeAgent, we’ve created a handy furlough claim calculator for monthly payroll to help you work out the numbers you need.

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