The next deadline for submitting CJRS claims for pay periods in January is Sunday 14 February, but before you launch into those calculations you should read the revised HMRC guidance and the new CJRS Direction.
The changes mainly affect claims for employees who don’t receive a fixed rate of pay each month, so are defined as variable pay employees. In order to calculate the reference figure for these employees, on which to base 80% for the CJRS claim, the employer can use either:
- the calendar lookback method (look at an equivalent earlier month), or
- the averaging method (look at the average pay in a defined period).
For pay periods in January and February 2021 the employer should lookback to those months in 2020, but for March and April 2021 they should look back to March and April 2019.
If the employee was not employed by that employer in the earlier period, the employer can only use the averaging method to calculate the base wages for the 80% CJRS claim.Averaging method
Where the employee was included in a CJRS-1 or CJRS-2 claim as they were employed before 19 March 2020, the averaging method uses the pay reported under RTI for 2019/20.
If the individual joined the payroll later the averaging method should look at the average pay payable between 6 April 2020 (or when the employment started if later) and the date they were first furloughed on or after 1 November 2020.
You should also know that HMRC now publishes the name of every business which submits a claim under CJRS. The list of those who made claims for pay periods in December 2020 is now out.
The list for CJRS claims made relating to January 2021 pay periods will include an indication of the value of claim within a banded range, and the company reference number. These details of CJRS claims will also be published every month until the scheme ends.
From February 2021 employees will also be able access their online personal tax account and see whether their employer has made a CJRS claim including wages they should have received.Written by the Tax Advice Network