The HMRC portal is now open to submit CJRS claims for periods starting on and after 1 November. Don’t assume that the rules for CJRS-3 are exactly the same as for earlier versions of the CJRS, as there are some important differences.
All CJRS-3 claims must be submitted by the 14th day of the month following the calendar month they apply to. Thus, claims for periods in November must be submitted by 14 December. This will be a tight deadline for many employers, especially where employees are flexi-furloughed so they work different hours each week. The guidance says a claim should not be submitted until the employer is certain of the hours worked in the claim period.
This is the ‘usual pay’ which is the base amount on which you calculate 80% as the furlough pay. But the reference pay won’t be the same for all employees, as it depends on when the individual joined the payroll:
Fixed pay (ie fixed salary)
- On payroll at 19 March 2020: pay in the last pay period that ended on or before 19 March 2020.
- Other employees: pay in the last pay period that ended on or before 30 October 2020. For monthly paid employees this will normally be the September pay period as the October pay period ended on 31 October.
- On payroll at 19 March 2020: higher of wages in corresponding calendar period in 2019/20 and the average wages paid in 2019/20.
- Other employees: average pay since the individual started working for the employer.
The furlough scheme will cover the major holiday period over Christmas and New Year. While furloughed, employees will continue to accrue entitlement to paid leave as part of their employment contract. Employers and employees can agree to vary holiday entitlement, but not below the 5.6 weeks of statutory paid leave per year.
Holiday taken while furloughed must be paid at the employee’s contractual rate, ie the normal rate of pay. Where pay varies the ‘normal pay’ is calculated as the average pay looking back over 52 working weeks. However, this calculation should exclude any holiday pay and any furlough pay which was paid during that 52-week period. The holiday pay due may thus be higher than the furlough pay (80% of reference pay), and employers will have to make up the difference.
Written by the Tax Advice Network