The Government has introduced a Coronavirus Job Retention Scheme (CJRS) to support businesses whose operations have been severely affected by the coronavirus crisis. This scheme reimburses the business for the employment costs of the employees they would otherwise need to make redundant or to lay off temporarily without pay. The scheme is similar to emergency legislation in Spain allowing for the temporary suspension of employment contracts.

The CJRS supports an arrangement of ‘furlough’ during which the employer can claim reimbursement from HMRC of 80% of the employee’s gross salary, up to a cap of £2,500 per month while the employee is not working. Commission and bonuses cannot be included in the claim. The employer can also reclaim employer National Insurance contributions and some employer pension contributions. Unlike in Spain, there is no requirement for the employer to commit to retaining the employee for any length of time after it is able to re-start its business activities.

All UK organisations with employees are eligible to receive support under the scheme, provided they had an operative PAYE payroll on 28th February. This is understood to include foreign companies provided they operate a UK payroll through PAYE.

The CJRS applies to any employees of the business, and other workers paid through PAYE such as casual staff, so long as they were on the organisation’s payroll at 28th February. Employees hired since 1st March are not eligible. It will not cover consultants and contractors who are outside PAYE, who may be eligible for support under the separate Self-Employed Income Support Scheme.

The scheme can also be used where a business chooses to re-hire employees who were dismissed on redundancy grounds from 1st March. In this situation the employer may require the repayment of any redundancy payments which have already been paid.

Unlike in Spain, the scheme does not directly support employees who are put onto reduced hours and pay (short-time working), and both employer and employee may be better off financially if the employee is instead fully released from their work duties. The scheme also cannot be used for employees who were already on unpaid leave before 28th February.

In order to access funding from HMRC, the business has to designate affected employees as ‘furloughed workers,’ and communicate this change to the employees in writing. This is likely to require the consent from the employees under their employment contract. It is best practice to set out in writing the furlough arrangements and the employee’s express consent to this temporary variation of their contractual terms. An employee placed on furlough may not carry out any work duties for their employer. The minimum period of furlough is 3 weeks.

The business then has to submit information to HMRC about the furloughed employees and their earnings through a new online portal. It will take some weeks before this system is up and running, and the Government expects the HMRC to start making payments by the end of April 2020. The CJRS will initially operate for the period between 1st March 2020 to 1st June 2020.

Businesses will not be obliged to make up the 20% difference (or higher difference for employees whose salary is over £37,500) or any part of this difference, although the expectation is that they will do so if they can.

Cripps Pemberton Greenish is keen support Spanish Chamber of Commerce members with the implementation of furlough arrangements for their employees.  We have put together a bespoke package which combines guidance, documentation and hands-on advice.  It includes:

  • Guidance and FAQ’s to explain and support you with the process of implementing the scheme
  • A letter to staff explaining the scheme and the plans to put your staff on furlough leave
  • A letter to specific staff seeking their agreement to furlough leave and to vary their terms of employment
  • A follow up call (of up to 1 hour) or email to discuss any specific questions or concerns once the guidance and letters have been considered.

The fee for the package is £800 plus VAT. For more information, please contact us on 01892 506 329 or email





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