Last updated 7 October 2021

Background

On 3 March 2021, at the Spring Budget, the Chancellor confirmed that the Coronavirus Job Retention Scheme (CJRS) would close on 30 September 2021. 

The final version of the scheme was the third iteration of the original CJRS that commenced in March 2020. The 'extended' scheme commenced on 1 November 2020, following the announcement of further lockdown measures for England at the time, and was originally intended to run until 31 December 2020.  This end date was then pushed back a number of times as the pandemic evolved. On 5 November 2020, the Chancellor announced that the scheme would run until 31 March 2021.  At the same time, both the proposed Job Support Scheme and the Job Retention Bonus were postponed. On 17 December 2020,  the Chancellor confirmed a further extension of the CJRS to 30 April 2021. The final extension to 30 September 2021 at the Spring Budget meant that the third version of the scheme ran for a total of 11 months.

Guidance

Full guidance on the scheme remains available on GOV.UK on HMRC's Coronavirus Job Retention Scheme pages. 

HMRC also produced a step by step guide and a list of monthly claims deadlines. There were also webinars, (various recordings remain available) and more information on the business support finder on GOV.UK.

Details of earlier versions of the scheme which ran from March 2020 to June 2020 (version 1) and July to October 2020 (version 2) can be found here.

Outline of the scheme

The key features of the extended CJRS (version 3) were:

• Employees were entitled to 80% of the current salary for hours not worked up to a maximum cap of £2,500 per month throughout the lifetime of the scheme.
• Employees could be fully or flexibly furloughed – so they were permitted to work part time and be paid their usual salary for those hours, while receiving furlough pay at 80% for their unworked hours.
• Employees had to agree to being fully or part furloughed before their new working arrangements could start and the employer had to confirm details of their new terms and conditions in writing.
• Employees who were required to shield, were clinically vulnerable or had childcare responsibilities could be furloughed.
• Employers could claim support from the Government for the cost of unworked hours, although the support reduced from 1 July 2021 - with employers asked to contribute to employees' furlough pay during July to September.
• Employers had to meet any associated costs of Employer's National Insurance Contributions (NIC) and pension contributions from November 2020 to September 2021. 
• Claims had to start and end in the same month.
• Claims had to run for a minimum period of seven  consecutive days unless they related to a short period at the start or end of a month.
• Employers could claim up to 14 days in advance of making payments to staff but were encouraged to defer claiming until staff hours were finalised where possible, to avoid having to amend claims.

Employees received up 80% of their usual pay for the hours not worked throughout the scheme. There were special rules to determine what an individual’s usual pay was. (NB For periods from 1 May, changes were made affecting how average wages should be calculated when an employee had variable pay and periods of statutory leave. These changes were explained in HMRC's guidance under the heading ‘Employees returning from family-related statutory leave’.) 

Guidance on when grants could be claimed for employees on holiday was issued in a HMRC Stakeholder Digest.

Employer eligibility

All employers with a UK, Isle of Man or Channel Islands bank account and UK PAYE scheme were eligible to furlough staff if they were unable to maintain their workforce because of the effects of coronavirus.

Employer support

For the period from 1 November 2020 to 30 June 2021, employers could claim support for 80% of the employee’s salary for unworked hours, but employers had to meet any associated Employers' NIC and pension contributions themselves. 

From 1 July 2021, the amount of support that employers could claim began to reduce. This reduction was intended to coincide with the opening up of the economy as lockdown measures were reduced.

• For July 2021 employers were able able to claim 70% of the employee’s usual wages for hours not worked, up to a cap of £2,187.50 per month.
• For August and September 2021 employers were able to claim 60% of the employee’s usual wages for hours not worked, up to a cap of £1,875 per month.

This meant that in July 2021 employers needed to contribute 10% of the cost of unworked hours (up to a cap of £312.50 per month) themselves, rising to 20% for August and September (up to a cap of £625 per month), in addition to paying any associated Employers' NIC and pension contributions.

Employee eligibility

As under the previous versions of the scheme, employees on any form of contract were eligible for furlough. This included company directors, although support was only available for remuneration taken as salary, not as dividends. Support was provided for usual hours not worked, with the calculations of usual hours largely following the principles established in version 2 of the scheme when flexible furlough was introduced. 

To include an employee in a claim for furlough, the employer must have included that employee on their payroll by specific dates, which changed as the scheme progressed. Being included on the payroll meant that HMRC had received an RTI submission reporting a payment to the employee by the employer by the required date. 

For claims from 1 May 2021 to 30 September 2021:

• Employees must have been on the employer’s payroll (i.e a payment of earnings must have been notified to HMRC) for the employee at some point between 20 March 2020 and 2 March 2021.

For claims from 1 November 2020 to on or before 30 April 2021:

• The employee must have been included on an RTI submission at some point between 20 March and 23:59 on 30 October 2020; or
• If the employee was made redundant or stopped working for the employer, they could be still be furloughed if they were re-employed after 30 October 2020 as long as they were on the employers' payroll by 23:59 on 23 September 2020.

The extended scheme therefore included individuals who started work for the employer after 19 March 2020 and who were excluded from earlier schemes.  

There were special rules which applied if employees were transferred from another business under TUPE.

As under previous schemes, employees were not allowed to do work for their employer during furloughed hours. Employees who continued to work put their employer’s claims at risk and employers were required to take steps to actively ensure that employees were not working during furloughed hours. 

Employees could undertake training during furloughed hours provided that:

• they did not generate income for or provide services to their employer; and
• their furlough pay covered the appropriate National Minimum Wage for their age for the time they spent training. If it did not, their pay had to be topped up.  

Claim dates

For the version 3 of the scheme, the claim window closed 14 days from the end of the month (or the next working day where this was a weekend or bank holiday). Late claims were not accepted unless the employer could show that they had a reasonable excuse.  The deadlines for claims can be found on GOV.UK.

Employers had only 28 days from the end of the month to increase their claim if they realised that they had made an underclaim (or to make any other necessary amendments). 

Claim templates

On 28 May, HMRC announced that they would be expanding the number of employers who could use a template to make a claim, rather than enter the details of each member of staff for whom a claim was being made manually into the online system. From that date, employers who had furloughed 16 to 99 employees were able to claim by uploading a template to HMRC. Previously only employers who were claiming for 100 or more employees could use the template approach.

Publishing Employer Names 

One of the new elements of the extended CJRS (compared to previous schemes) was that HMRC published the names of employers who had made claims under the scheme together with an indication of the amount each employer had claimed.

The published details only related to claims made in the period from 1 December 2020 to 30 September 2021. So an employer who only made claims during March to September 2020 for example and who did not claim again, did not have their details published. An employer who started to claim in March 2020 and claimed until September 2021 will have had details of their claims for the months of December 2020 to September 2021 published.

The publicity measures were a result of following recommendations from an NAO report in October 2020 that such publicity could help to reduce fraud by enabling employees to see whether their employer was making claims on their behalf.  From December 2020, employees were able to check if a claim had been made in respect of them by logging into their Personal Tax Account.

For more details on the publication of employer names see here. 

Key differences to earlier schemes

In general, the third version of the CJRS (version 3) operated very much as the earlier versions did from March to June 2020 (version 1) and July to October 2020 (version 2).

The key differences were:

• Employees did not need to have been furloughed prior to 1 November 2020 to be eligible for CJRS version 3. The rules which required an employee to have been furloughed under version 1 of the scheme to access support under version 2, did not apply to version 3.
• The cap on the maximum number of employees who could be furloughed which applied under version 2 of the scheme did not apply to version 3. From 1 November 2020, there was no limit on the number of eligible employees who could be furloughed. 
• The names of employers using the scheme were published (as noted above). 

Overclaims

Where an employer identifies at any point that they have made an overclaim, they are required to adjust this on their next claim or contact HMRC for a payment reference number. Guidance on the process, including how to report overclaims on subsequent claims, is available from HMRC.

Employers should notify HMRC and repay any overpayments by  the later of:

• 90 days from receiving the CJRS money they were not entitled to
• 90 days from the point circumstances changed so that they were no longer entitled to keep the CJRS grant.

See also our articles Correcting Coronavirus Job Retention Schemes and Correcting Coronavirus Job Retention Schemes - interaction with PCRT.