CJRS – Guidance update

14 January 2021

When CJRS was first introduced back in March 2020, there were a number of employees, paid via an annual payroll, that were not eligible for the furlough grants. Typically, this related to directors who paid themselves an annual salary at the end of the tax year, which was after 19 March, the original eligibility cut-off date. 

When the chancellor announced that the scheme would be extended past the original end date of 31 October 2020, he also changed the eligibility criteria so that those who were not previously eligible, could now be eligible for the extension to the scheme. Included in the change are those who were paid an annual salary after 19 March 2020, but before 30 October 2020. 

There has been some confusion on how the furlough claim would be calculated for those who were paid an annual salary. In the latest  guidance update, HMRC has now made it clear how to calculate the furlough claim and includes an example of this in practice. The addition to the guidance on this subject will, we are sure, be of great help to payroll professionals who are calculating furlough for those on an annual payroll. 

In addition, HMRC has added more information for those that are eligible to claim the Employer Allowance (EA). Employers are reminded that they should adjust their EA claim to reflect the amount of National Insurance (NI) claimed under the original scheme. HMRC point out within this section that making a claim for NI under CJRS and not adjusting the EA to reflect what has been claimed, could be deemed as fraud. Full and further details on this can be read here

The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.