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Where Taxpayers and Advisers Meet
Last Call for CJRS Eligibility – Employees Must be Formally on Furlough by 10 June in Almost All Cases
10/06/2020, by Lee Sharpe, Tax News - PAYE and Payroll Taxes, National Insurance, NICs
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The Coronavirus Job Retention Scheme (CJRS) has been extended from its initial period of 3 months to 30 June, now to 31 October – a total of 7 months.

However, while the 4-month extension carries on largely as before, some important changes have been made to “Phase 2”, taking effect from 1 July.

Encouraging Return to Work

Phase 2 seeks to encourage an overall return to work, by

  • Permitting employees to return to work on a part-time basis during a period of furlough, whereas the original CJRS required that an employee could do no work at all during a period of furlough

But also:

  • At the individual level, only employees who have previously been furloughed (or been eligible) under the original CJRS can be furloughed under Phase 2
  • At the employer level, the maximum number of employees claimed for in any period under Phase 2 cannot exceed the maximum recorded under Phase 1.

Given that the minimum furlough period under Phase 1 is 21 days, this means that an employee must have be furloughed no later than 10 June 2020 under Phase 1, in order to be eligible for furlough at any point in Phase 2.

Special Exceptions to the 10 June Deadline

Having said that, the Government announced yesterday (9 June 2020) that parents returning to work after paternity / maternity leave would potentially be eligible under Phase 2, even if not previously furloughed under Phase 1, so long as their employer had already furloughed somebody under Phase 1. This announcement covers employees subject to:

  • Statutory Maternity Leave
  • Statutory Paternity Leave
  • Adoption Leave
  • Shared Parental Leave
  • Parental Bereavement Leave

CJRS Phase 2 Implications

While we await more detailed guidance to be issued on 12 June, the following basic features of Phase 2 of the CJRS are now established:

  • From 1 July, employees can work while furloughed; employers are expected to cover the cost of gainful hours as normal (i.e., pre-CJRS normal)
  • Government CJRS support/contribution will be based on the proportion of non-working hours to usual hours worked in a CJRS furlough claim period - the apportionment will be on an hourly basis
  • From 1 July, claim periods will no longer be able to straddle months
  • From 1 August, employers will have to cover the cost of Employers’ NICs and pension contributions attributable to the non-working/furloughed proportion of an employee claim (since they will by default be covering such costs in relation to the part-time working proportion, the effect is that, from 1 August 2020, employers will be paying ALL of the Employer NIC and pension contributions)
  • For periods 1 September onwards, the Government’s contribution will be limited to 70% of ‘normal pay’ with the employer expected to pay the 10% required to make up to the 80% due under CJRS
  • For periods 1 October onwards (i.e., the month of October given that it is expected to cease on 31 October) that will fall further to 60% Government contribution to CJRS versus 20% Employer contribution

The Government’s initial guidance on the extension of the CJRS and the Self-Employed Income Support Scheme) can be found at:

Chancellor Extends Self-Employment Income Support Scheme and Confirms Coronavirus Job Retention Scheme Next Steps



About The Author

Lee is TaxationWeb's Articles & News Editor and writes for TaxationWeb. He is a Chartered Tax Adviser with experience of advising individuals and owner-managed businesses over a broad spectrum of tax matters.
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