Busbys Chartered Accountants

Coronavirus update 14 – 12 November 2020
Extension of CJRS and other support for employers

In the last month and a half, the Government has made many announcements and published much information on the planned support for employers to follow on from the Coronavirus Job Retention Scheme (CJRS) which was “definitely” going to end on 31 October. But ultimately the Chancellor had to abandon his proposals, and instead he has extended CJRS to 31 March 2021.

So, this is when I am grateful that I never got round to writing to you about the Job Support Scheme - my crystal ball was working well!

So this newsletter is primarily for employers, but employees may also want to know what the next few months hold in store.


HMRC continues to remind employers that any overclaimed CJRS grants must be repaid. Details were provided in Newsletter 12 - https://www.busbys.co.uk/Coronavirus_Update_12/. If an error was made, then employers must notify HMRC within 90 days of making the incorrect claim, but the simplest way to do so is to offset the correction against their next claim. But if that is not possible (e.g. the error exceeds the claim for October) then let us know or see https://www.gov.uk/guidance/pay-coronavirus-job-retention-scheme-grants-back. If the 90-day deadline has passed, then there is a risk of interest and penalties, so in these circumstances, please do consult us.

We do feel that HMRC may look more closely at companies whose only employees are directors at some point in the future. This may seem harsh, given how little support these businesses have been given, but directors who have been furloughed should not have undertaken any work for their companies that is not covered by the statutory duty exemption. This area was covered by our 5th newsletter and is perhaps worth revisiting - https://www.busbys.co.uk/Coronavirus_Update_5/. Also look at HMRC’s statement on what work can be undertaken by directors on furlough, and what documentation should be prepared – section 2 of https://www.gov.uk/government/publications/individuals-you-can-claim-for-who-are-not-employees/individuals-you-can-claim-for-who-are-not-employees.

So, before making further CJRS claims, do make sure that you qualify for support. You should only furlough staff (and that includes directors, spouses and children) if you are now being adversely affected by Covid-19. Just because you have been affected earlier this year does not automatically mean that you can continue to furlough employees. The government wording says “If you cannot maintain your workforce because your operations have been affected by coronavirus (Covid-19), you can furlough employees and apply for a grant….”. Furthermore, your business must still be actively trading (or would be, if it were not for Covid-19 restrictions).

For many businesses it will be obvious, but for others, care is needed. So consider a few examples:

  1.  Your business is a public house and restaurant, with letting rooms which are being used by NHS staff. Clearly the pub and restaurant are closed, so you are affected, and you can claim CJRS support, even though you are still able to let your rooms.
  2. You and your two employees provide first aid training services to the corporate sector. You cannot provide physical training, but you do now run courses on Zoom. But your income is already down 50% this year, and both employees are only working part time with minimal bookings for the next few months. You are affected and can claim CJRS support.
  3. You provide regulated legal services to theatres through a limited company, and have had no work since March. After the first lockdown (when you did furlough yourself), you have been trying to expand your clientele into other entertainment sectors over the summer, but without success. You now wonder if you can go back onto furlough again. But you have just turned 70, and have not renewed your professional indemnity insurance. In these circumstances, you can no longer be “actively trading” and you should therefore stop any further CJRS claims.
  4. You run an outdoor children’s activity centre on a self-employed basis, and have 8 staff, all of whom have been flexibly furloughed since July due to a drop in demand. In previous years you would close at the end of the October half term holiday and would not normally reopen until the Easter holidays. The staff remain employees during the winter, but there is no obligation under their employment contracts to pay them when your centre is closed, and historically you have performed any essential maintenance over the winter yourself. In these circumstances, you should not (continue to) furlough your staff because they would not normally be paid.
  5. Take the previous example again, but with the business operating as a limited company. In these circumstances, you would be an employee (as a Director) and then you would continue to draw a salary. But the maintenance work still needs to be undertaken, so you will need to continue to work for the benefit of the company’s business, and that means you should not furlough yourself, or make any claim under for CJRS support.
  6. And finally, using the same limited company example again. Your spouse is the Company Secretary, but the only work that he does is to make sure that the accounts are filed, and the annual confirmation statement is completed. These are statutory duties, so they would not preclude him from being furloughed. But he has no other duties, and now that the activity centre is closed anyway, the company’s operations are no longer affected by coronavirus. So, no furlough claim should be made for him either.

Clearly all of this is subject to interpretation, and the above examples have been made up by us – they are not HMRC examples! But if you are in doubt about whether you should take advantage on the CJRS extension, do please contact us.

And finally, on this subject, I would reproduce one other little gem, hidden in the detail of the government guidance on the new rules: “From December 2020, HMRC will publish employer names and for companies and LLPs, the company registration number of those making claims [under CJRS] in respect of claim periods from 1 December 2020 onwards.” So, make sure that you feel comfortable making CJRS claims from 1 December onwards, and bear in mind that this list will be in the public domain, and so can be seen by employees, suppliers, customers and finance providers. I wonder why Big Brother has just popped into my head…...

But if you do feel comfortable taking advantage of CJRS, then read on:


Firstly, I would confirm that the “old” scheme came to an end on 31 October, and this is to remind you that all claims under the original scheme must be made by 30 November. The old scheme then closes, and no claims for pre 31 October furlough grants can be made after that date.


The extended CJRS scheme is fundamentally the same as the old scheme, but there are differences – see below. But the basic starting point is to think back to August, as the new scheme effectively mirrors the old scheme rules for that month.

So the main points are:

  • For November, December and January, the government will cover 80% of gross pay for hours not worked, and the employer must pass this on in full to the employee.
  • The monthly grant is still capped at £2,500 per employee, and this maximum must be proportionately reduced where the employee does do work.
  • Therefore, flexible furlough is still permitted.
  • Employers can still top up their employees’ wages, but they do not have to.
  • But employers will need to cover the employer national insurance costs, and the employer pension contributions.
  • And employees are still entitled to all their normal statutory rights (e.g. bank holidays, annual leave, parental rights and redundancy entitlement etc.), and must still be paid at least the National Minimum Wage for hours worked, and (in our view) full pay for holidays taken.
  • If employees are put on furlough (whether flexibly or full time), then they must not do any work for their employer. But they can undertake training, and they can also volunteer or work elsewhere if that is permitted under their contract of employment.
  • For February and March, the government will announce the level of support that will be granted for those months. My crystal ball says that February may look rather like September (70% support) and March could look like October (60% support).

But there are some changes:

  1. Claims must now be filed by 14th of the month following the claim period. Most employers will file claims as soon as the payroll is run, but if you have not been in the habit of doing this, please note the shorter deadline.
  2.  The earlier claim deadline will have particular relevance to anyone whose pay period does not align with the calendar month, so in those cases, do take particular care to lodge your claims on time. You will still need to make two claims, as a claim period cannot straddle a month end – e.g. your payroll month goes up to 25th of the month. So, you need to lodge two claims by 14 December:
    • for the period 1 November to 25 November
    • and then for the period 26 November to 30 November
    The latter claim will need to be lodged well before the next pay day.
  3. You do not need to have claimed under the old CJRS scheme to qualify for the new scheme. This is particularly good news for newer employers, who did not have a payroll in place before 19 March. To qualify for the new CJRS, your payroll scheme must have been set up (and you must have filed an RTI submission) before 30 October.
  4.  Your employees need not have qualified under the old CJRS scheme – as long as you had reported a payment to an employee under RTI before 30 October, you can furlough them from 1 November, and make a claim.
  5. If an employee was made redundant after 23 September (and an RTI submission had been made for them before that date), then an employer can re-employ them on or after 1 November and then put them on furlough.

How to calculate the furlough claims:

  1. For anyone who was furloughed under the old scheme, or for anyone who was eligible under the old scheme (even if they did not use it), the calculations are identical to those carried out in August. So, the normal pay and hours worked must be based on the average 2019/20 earnings, or the same month last year if higher. See our previous newsletters if you need more detail.
  2. But if you or your employee are new to CJRS (i.e. you or your employee was not eligible to claim under old CJRS), then you need to apply new rules:
    • If your employee is salaried and works regular hours, then the furlough claim will simply be based on their monthly salary.
    • But if the employee is on variable pay (e.g. they are entitled to commission, overtime etc. or just work irregular hours), then you will need to calculate their average hours and pay for the period 6 April 2020 (or their employment start date if later) to the last day of work prior to going onto furlough.
  3. The maximum claim is still £2,500 per month for someone who is fully furloughed. This maximum must be proportionally reduced if the employee is flexibly furloughed.

A few other points to note:

  • You cannot apply the new rules to someone who qualified for the old CJRS scheme, even if you have given them a salary increase during this tax year.
  • But you can top up salary to any amount, so some employers may feel this is fairer to the employees who have had pay increases.
  • It is still permissible to furlough staff who would otherwise be on statutory sick pay. The scheme is not intended to cover short term sickness absences, but if the employer needs to furlough the employee for business reasons (e.g. you are in the hospitality sector and cannot open), then it is permissible to furlough them instead of paying SSP.
  • You can also furlough staff who are shielding, or if they have caring responsibilities resulting from Covid-19.
  • The first claims (for November) can be made on or after 11 November, but you cannot claim until the end of the pay period is less than 2 weeks away. Grants should be paid within 6 working days, as before. The claims process appears to be exactly the same as for previous CJRS claims.
  • As before, claims can be made before staff are paid, but do remember that they cannot be calculated until the payroll calculations have been completed!
  • We will be able to make claims for clients who use our payroll service but do please note the point immediately above!


Firstly, a couple of schemes that are not now proceeding:

  • The Job Support Scheme appears to have been completely abandoned and replaced in its entirety by the extension to CJRS. The Government said this “is postponed”, but the first iteration (whereby employees had to work a third of their hours, and the government only granted a maximum of 22% of gross pay) was not warmly received and seemed unnecessarily complicated and expensive for employers. The second version was more generous, but it was still complicated, so why not stick to the tried and tested CJRS form of support?
  • The Job Retention Bonus has been cancelled for now – to remind you, this was the one-off £1,000 bonus that could be claimed by employers if they still employed previously furloughed staff continuously through to 31 January 2021. Again, it is has been superceded by the CJRS extension, but this incentive may be brought back at a later date. The Government guidance says “we will redeploy a retention incentive at the appropriate time”. If they do, my crystal ball says that some of the qualifying criteria may be similar – and one of those was the requirement for employees to earn at least £520 per month to qualify. Perhaps something to consider.

On the other hand, the government have made a lot of noise about the Kickstart Scheme. This is an incentive scheme to take on new employees aged between 16 and 24 who are on Universal Credit, and grants are available to cover salary equal to the National Minimum (or Living) Wage for 25 hours per week, plus the associated employer national insurance and pension contributions. There is also a grant of £1,500 per job placement to cover set up costs, support, and training. The only snag was that the headlines implied that an employer had to take on a minimum of 30 new employees to qualify. I saw that and thought that was just a “big company” incentive.

But think again – if you only take on one new employee, you could qualify. To do so, you need to apply via a “Kickstart Gateway”, and it seems that many local authorities, charities and other trade bodies have set themselves up to offer this route into the scheme, and there are commercial providers as well. In effect they are gathering together a number of individual employers to reach the qualifying threshold of 30 employees, and then they claim the grants on your behalf. Kickstart Gateways that are registered locally include Kent Invicta Chamber of Commerce, Sussex Chamber of Commerce, and a number of local councils such as Sevenoaks, Gravesham and Mid Sussex.

I fear that this scheme may have relatively limited appeal to our clients – sadly most client employers have been maintaining their workforce at best, and many have had to make redundancies. But this scheme does run through to 31 December 2021, so it may be of value next year. I have only had one enquiry about it so far, and it is probably not a scheme that we will expect to advise on, so if you are interested in finding out more, go to https://www.gov.uk/guidance/apply-for-a-kickstart-scheme-grant-29-or-less-job-placements.