Change to the Qualifying Date for Coronavirus Job Retention Scheme and Further Updates

The government’s latest guidance, issued on 15 April 2020, provides a significant update to the Coronavirus Job Retention Scheme (CJRS). The Treasury has also now issued a Direction to HMRC outlining rules for eligibility and instructions for making payments, titled The Coronavirus Act 2020 Functions of HMRC (Coronavirus Job Retention Scheme) Direction, providing further insight into the mechanics of Scheme.



In the updated guidance it is stated that the Scheme applies where businesses have been severely affected the pandemic so that they cannot maintain their workforce. However the Direction indicates that the purpose is to cover the costs of employment for furloughed workers arising from the emergency that has resulted as a consequence of the pandemic. Arguably, therefore the scope is wider than anticipated and even if a business is not severely affected it may consider furloughing staff, for example where they have caring responsibilities. Ultimately, there is no obligation for the employer to do so.


Qualifying date

The qualifying date, when the worker has to have been on the employer's payroll, has changed from 28 February to 19 March 2020, on the strict condition that the employer had submitted real time information (RTI) payroll data by that date. This is welcome news to those workers who changed jobs and fell outside of previous eligibility criteria. As most employers pay salary at the end of the month RTI data will be submitted at that time so it remains to be seen whether this extension has a significant impact on the number of claims.

Further updates on the extent of the Scheme and practical details are outlined below.



The Direction from the Treasury states that there must be written agreement from the employee that they will cease all work during a furlough period. This is a considerable departure from current HMRC guidance which states that written notification of furlough on the foot of agreement was sufficient. Interpretation of this Direction may be a key issue for those employers who have been unable to contact staff who were already laid off prior to the Scheme commencing.



The Treasury’s Direction states that a furloughed Director may only undertake work required to fulfil a duty or other obligation arising by, or under, an Act of Parliament relating to the filing of company accounts or provision of other information relating to the administration of the director’s company. Therefore, a Director’s duties whilst furloughed are extremely limited.



The government has clarified that individuals can furlough anyone they provide employment to, such as nannies/childminders or carers for example, provided they pay them through PAYE, and have sent HMRC a Real Time Information (RTI) submission on or before 19 March 2020.



The English High Court has confirmed, in a recent ruling concerning the insolvency of the Carluccio’s restaurant chain, that where a company is taken under the management of an administrator, the administrator will also be able to access the CJRS.


Calculating pay

If your employee’s salary has increased recently ensure that you have calculated your claim based on the employee’s salary in their last pay period prior to 19 March 2020.

In respect of employees whose pay varies, if they have been employed for 12 months or more, you can claim the highest of either the same month’s earning from the previous year or the average monthly earnings for the 2019-2020 tax year. If the employee has been employed for less than 12 months, claim for 80% of their average monthly earnings since they started work until the date they are furloughed.

The Treasury’s Direction confirms that the amount of salary for any employee must disregard anything which is not "regular salary or wages." However, it confirms that employers can make a claim for any regular payments they are obliged to pay their employees, including past overtime and compulsory commission payments. Any discretionary bonus (including tips) and commission payments and non-cash payments should be excluded from calculating pay.


Annual Leave

The government has yet to clarify the position of furlough and annual leave. In the meantime it is advisable to enable employees to request and take holidays in the usual way, subject to the employer’s agreement with furloughed workers being entitled to their usual pay in full, for any holiday they take.


HMRC Portal

The HMRC Portal through which companies can apply for furlough payments will be accessible from Monday 20 April 2020. In readiness for making a claim to the CJRS employers should ensure they have the following details at hand to avoid any delay in payments:

  • Your company’s bank account details;
  • Contact details for someone in your company for HMRC to liaise with should any issues arise when processing your claim;
  • Your Company Unique Tax Reference Number or Company Registration Number;
  • Name, National Insurance Number and payroll number for each furloughed employee;
  • The total amount being claimed for all employees and the corresponding furlough period for each employee; and
  • Retain all records and calculations in respect of your claims.

Employers with less than 100 furloughed staff are required to enter details of each employee directly into the system. Employers with 100 or more furloughed staff will be asked to upload a file (xls .xlsx .csv or .ods) with the information instead.

Should you require advice or assistance in relation to any of the above please do get in touch with Jan Cunningham or David Mitchell in our Employment Team.