Update on the Coronavirus Job Retention Scheme (CJRS)

There are some key points to note following the extension of the furlough scheme through to April 2021.

Variably paid employees – lookback periods

This only applies to employees who were eligible for the initial phase of the CJRS (i.e. were on the payroll before 19 March 2020).

As a reminder, for employees whose salaries are not fixed, their ‘reference pay’ and ‘usual hours’ for the lookback period will need to be established. These are based on the higher of the following:

• the corresponding period from last year, or
• the average from the 2019/2020 tax year.

The “corresponding period from last year” was clear during 2020, however, with the scheme being extended through to 2021, updated guidance has been provided.

In summary:

NOTE: February 2020 was a leap year (29 days), therefore claims for February 2021, can use the full pay for February 2020 or an adjustment can be made to 28/29ths of that amount.

Deadline dates

The claim submission deadlines dates have been confirmed as:

Annually paid directors

We are pleased to see that HMRC have clarified the treatment for furloughing annually paid directors.

They have confirmed that furlough claims can be submitted for annually paid directors only where there is an “imminent” payroll run.

Based on the above, there appear to be two options:

• If a director is furloughed for a single month, the annual payment and RTI submission should be brought forward to be processed earlier than normal – this then ensures that it links with the month that the CJRS submission is made.

• If a director is furloughed for several months, then it is advised that they be transferred to a monthly RTI submission pattern, ensuring that there is a corresponding payroll run each month alongside the CJRS submission.

Details of your claim that will be publicly available

HMRC announced that if you claim for periods starting on or after 1 December 2020, they will be publishing details of your claim on GOV.UK. They confirmed this is for two reasons:

• To meet our transparency commitments
• To deter fraudulent claims

Also, from February 2021, furloughed employees will be able to view claims made by their employers on their personal tax account. This will cover all claim periods starting on or after 1 December 2020.

If you have any questions on the CJRS, please do get in touch and speak with your usual contact at RG.