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The Coronavirus Job Retention Scheme Explained

Paid on a per employment basis ...

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Posted by Helen Beaumont on 01/04/2020 @ 8:00AM

HMRC released detailed guidance on the Coronavirus Job Retention Scheme (CJRS) last week. I've summarised the key points for you based on what we know so far ...

More information on the Coronavirus Job Retention Scheme has been released!

More information on the Coronavirus Job Retention Scheme has been released!

copyright: kurhan / 123rf

The scheme pays a grant of up to 80% of an employee's salary up to a value of £2,500, along with the employer's NI contributions and the minimum automatic enrolment employer pension contributions on that salary.

"Employees' salary will still be subject to Income
Tax and National Insurance!"

But the National Minimum Wage (NMW) and National Living Wage (NLW) does not apply to furloughed employees (there are exceptions). Fees, commission and bonuses are also not included.

If flexible contract employees have been employed for longer than 12 months, the higher of the average monthly earnings for 2019/20, or their earnings from the same month the previous year should be used in your calculations. When employed for less than 12 months, use the average of their monthly earnings since they started.

A furlough grant is paid on a 'per employment' basis, so if your employment contracts allow individuals to have other employment, they may be furloughed by one, some or all of the other employers, with each employer making its own furlough payment claim!

Furloughed employees must be on payroll on the 28th February 2020 as employees hired after this date cannot be furloughed, or even claimed for. You can claim for full time or part-time employees, agency contractors and those on flexible/zero-hours contracts. The scheme covers employees made redundant since 28 February 2020 if they are rehired by the employer.

Employees on unpaid leave which began prior to 28 February 2020 cannot be claimed for and employees on statutory sick pay (sick or self-isolating) can only be furloughed after this date.

"Those on maternity leave, paternity leave, shared parental leave, and adoption leave can also be furloughed, though additional rules apply!"

I'm sure that there will be more information about the Coronavirus Job Retention Scheme over the coming days and weeks, so do watch this space to get more information as and when it's announced by the Government.

Until next time ...



Would you like to know more?

If anything I've written in this blog post resonates with you and you'd like to discover more, it may be a great idea to give me a call on 01908 774323 and let's see how I can help you.

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About Helen Beaumont ...


Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.

Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.

When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.