Please find below some updated information on the Coronavirus Job Retention Scheme (CJRS) which is designed to assist businesses during the current crisis.

Coronavirus Job Retention Scheme

Under the Coronavirus Job Retention Scheme, all UK employers with a PAYE scheme and a UK bank account will be able to access a grant to continue paying part of their workers’ salaries, for those that would otherwise have been laid off during this crisis.

A person is described as a worker if, among other things:

  • They have a contract or other arrangement to do work or services personally for a reward
  • They only have a limited right to send someone else to do the work (subcontract)
  • Their employer has to have work for them to do as long as the contract or arrangement lasts
  • They aren’t doing the work as part of their own limited company in an arrangement where the ‘employer’ is actually a customer or client.

An employee is a particular type of worker who enjoys enhanced employment rights, and is classed as an employee if, among other things:

  • They’re required to work regularly unless they’re on leave
  • They’re required to do a minimum number of hours and expect to be paid for time worked
  • They can’t send someone else to do their work
  • The business deducts tax and National Insurance contributions from their wages
  • They get paid holiday
  • The business’s disciplinary and grievance procedures apply to them
  • Their contract, statement of terms and conditions or offer letter (which can be described as an ‘employment contract’) uses terms like ‘employer’ and ‘employee’.

Both categories described above are covered by the terms of the Coronavirus Job Retention Scheme, and for the purposes of this guidance, both with be referred to here under the umbrella term ‘worker’.

The Coronavirus Job Retention Scheme applies to workers who were on your PAYE payroll as at 28 February 2020, and have been asked to stop working. HMRC will reimburse 80% of their wages, up to £2,500 per month. This is to safeguard workers from being made redundant.

The scheme is initially open for three months, until 1 June 2020, but will be extended if necessary. The minimum length of time that a worker can be furloughed is three weeks, and it is possible to place workers on furlough more than once within this three-month period, which may mean that teams of workers could be moved on and off furlough in three-week shifts if this suits the business.

Employers must gain agreement from any worker that they intend to designate as furloughed. When you have gained this agreement verbally, you should then confirm this in writing with a Notification of Furlough Status Letter.

The grant you receive will be for 80% of furloughed employee’s usual monthly wage costs, up to £2,500 a month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that wage.

The scheme will cover the cost of wages from the date at which a worker was asked to stop working, can be applied to at any time during the three-month initial operation period, and can be backdated to 1 March 2020.

From the date you have agreed to designate your employees as furloughed, you can begin paying 80% of their wages up to £2,500 per month, although you can choose to pay more if you wish.

From the employee’s perspective, their wages will still be subject to the usual Income Tax, National Insurance contributions, and any other relevant deductions.

Workers are free to refuse to be designated as furloughed but should bear in mind that by doing so they may place themselves at risk of redundancy, depending on the circumstances of the business and the development of the Coronavirus pandemic.

How HMRC will make their calculations

Employed for a full year or more:
If a worker has been employed by their current employer for a full year, the amount claimable will be based on the higher of either:

  • The amount the worker earned in the same month last year, OR
  • The average of the worker’s monthly earnings from the last year


Employed for less than one full year:
If a worker has been employed by their current employer for less than a full year, the amount claimable will be based on:

  • The average of the worker’s monthly earning since their start date


Employment started in February 2020:
If a worker started work for their current employer in February 2020, the amount claimable will be based on:

  • The worker’s earnings in February 2020, pro-rata


Furloughed workers may not undertake any work for their employer, but can undertake training activities if these can be done safely in accordance with public health guidance.

If a worker is on sick leave or is self-isolating, they cannot simultaneously be designated as furloughed, but when the sick leave or self-isolation ends, the worker can then be furloughed from that date.

The government expect that this scheme will issue its first grants at the end of April. If you anticipate a cashflow problem until that date, you may wish to investigate your company’s eligibility for the Coronavirus Business Interruption Loan Scheme. Details of this scheme can be found here along with information about other Coronavirus-related support for businesses.

Further information on support for businesses can be found on HMRC’s website.