To be eligible to be included in a claim under the furlough scheme (CJRS) for periods starting on or after 1 May 2021, the employee must be employed on 2 March 2021. The employee’s wages must also have been reported under RTI at some point between 20 March 2020 and 2 March 2021.
There is no requirement for the employee to have been included in a previous CJRS claim to be included in a CJRS claim for periods from 1 May 2021.
The calculation of furlough pay is complicated.
The main thing to note is that all worked hours must be based on the employee’s current contractual pay. However, furlough pay depends on the individual’s reference pay, which is in turn determined by when their pay was first reported on a FPS under RTI by the current employer as follows:
- FPS by 19 March 2020 – reference pay is the last pay period before this date
- FPS between 20 March 2020 and 30 October 2020 – reference pay is the last pay period before 30 October 2020
- FPS between 31 October 2020 and 2 March 2021 – reference pay is the last pay period before 2.3.21
The reference pay doesn’t change even if the contractual pay has increased or decreased. The furlough pay is 80% of reference pay. There are special rules for employees who have been transferred to a new employer under TUPE.
The cap on the amount of furlough pay in a CJRS claim remains as:
- £2,500 per calendar month; or
- £579.92 per week; or
- £80.65 per day for months with 31 days;
- £83.34 per day for months with 30 days.
From 1 July 2021
The employer can only claim back 90% of the furloughed pay, but employees must still receive 80% of reference pay. If the employee’s reference pay is £500 per week, the employee must receive £400 while furloughed, and the employer can claim £360 per week under the CJRS.
Written by the Tax Advice Network