Coronavirus Job Retention Scheme – more than just an extension

Coronavirus Job Retention Scheme

The CJRS has been extended to 31 March 2021, but the new scheme isn’t just a continuation of the old.

Image of Donna Sharp

Partner, KPMG Law

KPMG in the UK


Also on

On 5 November, the Chancellor announced that the Coronavirus Job Retention Scheme (CJRS) will now run until the end of March 2021. In effect, we now have ‘CJRS 3’, as there are some important differences from the earlier versions of the scheme, particularly around deadlines. This article sets out initial comments on HMRC’s new CJRS guidance published on 10 and 13 November 2020.

Financial support

From 1 November 2020 until 31 January 2021, employers can again claim grants, capped at £2,500 per month for each employee, for an employee’s unworked hours based on 80 percent of their reference pay. The Government has stated it will review the scheme in January 2021, and employers might be required to contribute to a furloughed employee’s direct salary costs from the start of February 2021.

Throughout the extension, employers must bear the cost of employer’s NIC and pension contributions on payments made to furloughed employees.


There is no requirement for either the employer or the employee to have participated in an earlier version of the CJRS.

Employees must have been on the payroll on 30 October and included in a Real Time Information (RTI) submission made between 20 March and 30 October 2020. In addition, individuals included in an RTI submission made between 20 March and 23 September 2020 who were made redundant after 23 September can be re-hired and furloughed.

Initially, employers will be able to claim for employees who are serving a notice period. However, from 1 December 2020 CJRS claims cannot be made in relation to any days during which the employee was serving a statutory or contractual notice period. This includes serving notice of retirement or resignation.

Employees can be furloughed if they are clinically extremely vulnerable, at the highest risk of severe illness from coronavirus, or on long-term sick leave.


Where an employee was previously furloughed, the same calculations for ‘usual hours’ and ‘reference salary’ should be used under the new scheme. This methodology should also be used for individuals furloughed for the first time on or after 1 November 2020 who were included in an RTI submission made on or before 19 March 2020.

A different basis will be used to calculate ‘usual hours’ and ‘reference salary’ for other employees.

Furlough agreements

As before, employees can be fully or flexibly furloughed. The rights of furloughed employees, and restrictions on what they can do for their employer during their non-working hours, are unchanged.

There is no minimum furlough period, though subject to certain exceptions claim periods will last a minimum of seven days.


Employers are able to submit claims under the new version of the scheme on and after 11 November 2020.

As before, claims can be submitted in anticipation of an imminent payroll run, or on or after an actual payroll run.

However, subject to weekends, claims must be submitted no later than 14 calendar days after the end of the calendar month in which the claim period falls. This means employers must be able to perform the relevant calculations and prepare claims within a much shorter time scale.

In practical terms, employers will need to know the number of hours an employee works during the claim period at the point of making the claim, as capturing actual hours for flexibly furloughed workers is critical to compliance. The short deadline may therefore need new processes to ensure the information is provided on time.

As employers can only claim for days in the calendar month, for payrolls that straddle a calendar month end and therefore cover more than one claim period, it will be important to ensure any estimated claims are later validated and reconciled to the actual payroll run to ensure compliance.

Finally, for claim periods from 1 December 2020, HMRC will publish details of employers that use the CJRS, including an indication of the amount of the claims made. At present there is no suggestion that large employers using the scheme should refrain from making payments to shareholders (as was proposed under the Coronavirus Job Support Scheme (CJSS)).

Other coronavirus employment support schemes

The proposed CJSS, which was originally scheduled to replace the CJRS from 1 November 2020, has been postponed. It appears possible the CJSS will now never come into operation.

The Government has also confirmed that the Coronavirus Job Retention Bonus (CJRB), which was to reward employers for keeping previously furloughed workers in employment until 31 January 2021, will be replaced by an alternative retention incentive at an appropriate time.

What should employers do now?

Employers should review their staff cost modelling and projections based on HMRC’s updated guidance for the CJRS, noting that the level of financial support available under the scheme might potentially reduce from the start of February 2021.

Additionally, employers who intend to use the new CJRS should review their payroll processes and procedures for calculating grants to ensure they will be able to submit claims by the new monthly submission deadlines. These are hard deadlines. HMRC has confirmed that claims will only be accepted after the deadline if employers have a reasonable excuse for late submission and have taken action to submit the claim as soon as possible.

In the short period before the end of November, employers should, therefore:

  • Review and, where appropriate, adapt the timing of payroll processes;
  • Capture standing data in relation to usual hours and pay so they can prepare the calculations before the end of the month once actual hours are known; and
  • Arrange support so claims can be made in the event of an unforeseen emergency that means the payroll process may not complete in time.

Employers must correct any underclaims within 28 days of the end of the relevant calendar month. Given this short window for corrections, it is therefore critical that, where possible, processes are introduced now to calculate and submit claims to HMRC that are correct the first time.

For further information please contact :

© 2021 KPMG LLP a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more detail about the structure of the KPMG global organisation please visit

Connect with us


Want to do business with KPMG?


loading image Request for proposal

Save, Curate and Share

Save what resonates, curate a library of information, and share content with your network of contacts.

Sign up today