Skip to main content
News article

Coronavirus: Check if you can claim for your employees' wages through the Coronavirus Job Retention Scheme

15 May 2020


Find out if you’re eligible and how much you can claim to cover wages for employees on temporary leave ('furlough') due to coronavirus (COVID-19).

If you cannot maintain your current workforce because your operations have been severely affected by coronavirus (COVID-19), you can furlough employees and apply for a grant that covers 80 per cent of their usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and pension contributions (up to the level of the minimum automatic enrolment employer pension contribution) on that subsidised furlough pay.

This is a temporary scheme that was initially put in place for four months starting from 1 March 2020 and will continue in its current form until the end of July. Employers can use the scheme anytime during this period. From August, employers currently using the scheme will have more flexibility to bring their furloughed employees back to work part time whilst still receiving support from the scheme.

This will run for three months, from August to the end of October. Employers will be asked to pay a percentage towards the salaries of their furloughed staff. The employer payments will substitute the contribution the government is currently making, ensuring that staff continue to receive 80% of their salary, up to £2,500 a month. More specific details and information around its implementation will be made available by the end of May.

The way to make a claim is online - the service should be simple to use and any support you need available on GOV.UK.

Please use the online support and do not contact HMRC unless it is absolutely necessary - any questions should be directed at your agent, representative or the GOV.UK Web chat service.

HMRC will check claims made through the scheme. Payments may be withheld or need to be repaid in full to HMRC if the claim is based on dishonest or inaccurate information or found to be fraudulent.

Coronavirus Job Retention Scheme grants are not classed as state aid.

Who can claim

You must have:

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

Any entity with a UK payroll can apply, including businesses, charities, recruitment agencies and public authorities.

If you work for a public sector organisation
The government expects that the scheme will not be used by many public sector organisations, as most public sector employees are continuing to provide essential public services or contribute to the response to the coronavirus outbreak.

Where employers receive public funding for staff costs, and that funding is continuing, HMRC expects employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them. This also applies to non-public sector employers who receive public funding for staff costs.

Organisations who are receiving public funding specifically to provide services necessary to respond to COVID-19 are not expected to furlough staff.

In a small number of cases, for example where organisations are not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response, the scheme may be appropriate for some staff.

Individuals
Individuals can furlough employees such as nannies provided they pay them through PAYE, and sent HMRC an RTI submission notifying a payment in respect of the employee on or before 19 March 2020.

Administrators
Where a company is being taken under the management of an administrator, the administrator will be able to access the Job Retention Scheme. However, HMRC would expect an administrator would only access the scheme if there is a reasonable likelihood of rehiring the workers. For instance, this could be as a result of an administration and pursuit of a sale of the business.

Employees you can claim for

See check which employees you can put on furlough to use the Coronavirus Job Retention Scheme.

Agreeing to furlough employees

Employers should discuss with their staff and make any changes to the employment contract by agreement. When employers are making decisions in relation to the process, including deciding who to offer furlough to, equality and discrimination laws will apply in the usual way.

To be eligible for the grant employers must confirm in writing to their employee confirming that they have been furloughed. If this is done in a way that is consistent with employment law, that consent is valid for the purposes of claiming the CJRS. Collective agreement reached between an employer and a trade union is also acceptable for the purpose of such a claim. There needs to be a written record, but the employee does not have to provide a written response. A record of this communication must be kept for five years.

You do not need to place all your employees on furlough. However, those employees who you do place on furlough cannot undertake work for you.

Minimum furlough periods
Any employees you place on furlough must be furloughed for a minimum period of 3 consecutive weeks. When they return to work, they must be taken off furlough. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of 3 consecutive weeks. 

Each period of furlough can be extended by any amount of time whilst the employee is on furlough. However, the scheme end date is the last day you can claim for through this scheme.

Before you claim

You will need to work out how much you can claim through the scheme. HMRC will retain the right to retrospectively audit all aspects of your claim.

Employers should discuss with their staff and make any changes to the employment contract by agreement. Employers may need to seek legal advice on the process. If sufficient numbers of staff are involved, it may be necessary to engage collective consultation processes to procure agreement to changes to terms of employment.

HMRC cannot provide your employees with details of claims that you make on their behalf. Please help them by keeping your employees informed, answering any questions that they might have. Please ask them not to contact HMRC.

If you use an agent who is authorised to act for you for PAYE purposes, they will be able to make a claim on your behalf. If you use a file only agent (who files your RTI return but doesn’t act for you on any other matters) they won’t be authorised to make a claim for you and you will need to make the claim yourself. Your file only agent can assist you in obtaining the information you need to claim (which is listed above).

If an agent makes a claim on your behalf you will need to tell them which bank account you would like the grant to be paid into.

When your employees are on furlough

You cannot ask your employee to do any work that:

  • makes money for your organisation or any organisation linked or associated with your organisation
  • provides services for your organisation or any organisation linked or associated with your organisation

Your employee can:

  • take part in training
  • volunteer for another employer or organisation

Employee taxes
Your employees will still pay the taxes they normally pay out of their wages.

This includes pension contributions (both employer contributions and automatic contributions from the employee) unless the employee has opted out or stopped saving into their pension.

Employee rights
Employees still have the same rights at work, including:

  • Statutory Sick Pay
  • maternity and other parental rights
  • rights against unfair dismissal
  • redundancy payments

Grants cannot be used to substitute redundancy payments. HMRC will continue to monitor businesses after the scheme has closed.

Working for a different employer
If contractually allowed, your employees are permitted to work for another employer whilst you have placed them on furlough.

For any employer that takes on a new employee, the new employer should ensure they complete the starter checklist form correctly. If the employee is furloughed from another employment, they should complete Statement C.

Further employer guidance and furlough letter template

Any furlough agreement with a member of staff should be in writing. The Labour Relations Agency (LRA) has produced guidance and a sample letter to help employers.

See the LRA's COVID-19 practical guidance - the Coronavirus Job Retention Scheme.

If you have specific questions on the Coronavirus Job Retention Scheme - see our FAQs on COVID-19: Managing staff health, pay, leave and absence.


First published 27 March 2020