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ICAEW KNOW-HOW TAXGUIDE

TAXguide 17/20: CJRS - The furlough scheme reinvented

Technical release

Published: 26 Nov 2020 Updated: 26 Jan 2021 Update History

The Coronavirus Job Retention Scheme (CJRS) has been extended until 30 April 2021 and altered from the previous two iterations. In this TAXguide ICAEW's Tax Faculty provides the answers to questions raised by attendees at its latest webinar explaining the changes to the CJRS recorded on 20 November.

Areas covered

The team have provided questions to all of these questions and these can be downloaded in the full guide. The questions cover:

  • Flexible furlough
  • Statutory sick pay
  • Meeting deadlines
  • Eligibility
  • Redundancy 
  • Directors
  • Annual leave
  • Changing hours/wages
  • Newly furloughed employees
  • Calculating average weekly earnings
  • Maternity leave
  • Correcting mistakes
  • Christmas
  • Guidance, resources and HMRC
  • General best practice

Webinar: CJRS V4 calculations

ICAEW’s Tax Faculty is urging employers and agents to watch a free webinar outlining how to calculate grant entitlement under the final phase of the Coronavirus Job Retention Scheme.

Tax

Sample questions

Here are some examples of the type of questions asked and the support the faculty has provided.

A hospitality business has shut down for now and will do a refit and will then reopen in the new year. Can they claim furlough for staff through until it reopens January?

It depends on the reason for closing down for the refit. If this is due to being impacted by coronavirus, so there is no business and they’ve taken the opportunity to do a refit, that is in the spirit of the scheme. If they were always planning to close down in December then it isn’t and no claim should be made.

What if business earnings are back to normal, but some staff still furloughed, would that be queried?

The business is supposed to be operationally impacted by COVID-19.

Can an employee be on full furlough in December while serving their notice?

No, any days on notice from 1 December 2020 exclude an employee from a claim.

For hourly paid employees if they now work more hours than when they were last on furlough can we use the increased average hours?

No, you continue to use the previous hours’ calculation you used for schemes 1 and 2 if they were eligible for those schemes.

I have a client who has shut his business for a week as one of his staff has tested positive for COVID-19. Can we claim furlough for the week rather than have to do all the flexible furlough calculations or does someone have to be off for three weeks to claim 'normal' furlough?

Yes, three-week furlough ended in June, it’s a minimum of a seven-day claim now, but you can ask employees to work as many or few hours in that week as you wish.

If a full payment submission is done for payment date 31 October and we have a new starter who came on payroll 1 October would they qualify for furlough as the cut off was the 30 October

It depends when it was sent, it is about the submission date not the payment date so if submitted on or before 30 October 2020, they are eligible.

ICAEW Know-How from the Tax Faculty

This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

TAXguide 17/20

PDF (320kb)

Download the complete set of questions and answers.

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Changelog Anchor
  • Update History
    26 Jan 2021 (12: 00 AM GMT)
    The end date of the scheme reference was amended from 31 March to 30 April, in light of the government announcement on 17 December 2020.