Coronavirus Job Retention Scheme (Furlough Scheme)

The Government’s Job Retention Scheme was launched to assist all UK employers to access support to continue paying part of their employees’ salary for those employees that would otherwise be laid off during the Coronavirus outbreak.

If an employer cannot cover staff costs due to COVID-19, they may be able to access support to continue paying part of staff wages, to avoid redundancies. HMRC will reimburse 80% of ‘furloughed workers’ wage costs, up to a cap of £2,500 per month.

From 1 July, businesses will be allowed to bring furloughed employees back part-time, a month earlier than previously announced. Firms will be able to set the hours and shift patterns staff will work when they return, but will have to pay wages while they're in work.

From August, employer contributions to the scheme will be tapered month by month, as follows:

  • August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay employer National Insurance (ER NICS) and pension contributions.
  • September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500.
  • October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500.

The scheme will close to new entrants from 30 June. From this point onwards, employers will only be able to furlough employees that they have furloughed for a full three-week period prior to 30 June. This means that the final date by which an employer can furlough an employee for the first time will be the 10 June, in order for the current three-week furlough period to be completed by 30 June. Employers will have until 31st July to make any claims in respect of the period to 30 June.

The Government’s CJRS factsheet can be found here

Full Government CJRS guidance collection here

How to make your claim

To prepare to make your claim you will need:

  • a Government Gateway (GG) ID and password – if you don’t already have a GG account, you can apply for one online, or by going to GOV.UK and searching for 'HMRC services: sign in or register'
  • be enrolled for PAYE online – if you aren’t registered yet, you can do so now, or by going to GOV.UK and searching for 'PAYE Online for employers'
  • the following information for each furloughed employee you will be claiming for: Name, National Insurance number, Claim period and claim amount, PAYE/employee number (optional).
  • if you have fewer than 100 furloughed staff – you will need to input information directly into the system for each employee. If you have 100 or more furloughed staff – you will need to upload a file with information for each employee; HMRC will accept the following file types: .xls .xlsx .csv .ods.

You should retain all records and calculations in respect of your claims.

Full details of applying for CJRS here

Key Points for Dealers

  • Cut-off date for employee eligibility for the scheme is 19 March 2020 – employers can claim for furloughed employees that were employed and on their PAYE payroll on or before 19 March 2020. This means that the employee must have been notified to HMRC through an RTI submission notifying payment in respect of that employee on or before 19 March 2020.
  • Regular payments to employees that dealers are obliged to pay can be claimed. This includes wages, past overtime, fees and compulsory commission payments. Apprentices can be furloughed in the same way as other employees and they can continue to train whilst furloughed.
  • Both the Apprenticeship Levy and Student Loans should continue to be paid as usual. Grants from the Job Retention Scheme do not cover these.
  • Any employees Dealers place on furlough must be furloughed for a minimum period of 3 consecutive weeks. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of 3 consecutive weeks.
  • If contractually allowed, Dealer employees are permitted to work for another employer whilst the Dealer have placed them on furlough.


The NFDA has taken legal advice from TLT to interpret the latest guidance for the Government Job Retention Scheme, which we have as follows:-

The language in the updated guidance has changed from the original, which as you know expressly excluded any commission or bonus payments. The guidance refers to the grant covering 80% of the “employees usual monthly wage costs” and now expressly includes “regular payments you are obliged to pay”.

The language used in the amended guidance is that any contractual payment can now be included in the furlough pay calculations. It is simply any discretionary payments that should be excluded, this is understandable as an unscrupulous employer could award large discretionary bonuses to staff during furlough when they were not otherwise due, and reclaim them. As the purpose of the scheme is to replace 80% of the employee’s lost “income” in the broad sense, then it makes sense. This was the point represented to government in the NFDA letters, that an employee’s real earnings are included.

We think that it is clear that the furlough pay can and indeed should include contractual commissions and bonuses that form part of the employee’s “regular payments” that the employer is obliged to pay.

It is, though important to note that as the grant arrangement is yet to be set up, and no employers have yet had applications for payment processed or made, there is no guarantee that the government will pay out any particular sums. However in light of this new guidance it seems impossible for them to argue that normal contractual entitlements to bonus/commissions are not included in the grant.”

Job Retention Bonus

In July, the Chancellor announced a new Job Retention Bonus to provide additional support to employers who keep on their furloughed employees in meaningful employment.

The bonus is a one-off payment to employers of £1,000 for every employee who they previously claimed for under the scheme, and who remains continuously employed through to 31 January 2021. Eligible employees must earn at least £520 a month on average between the 1 November 2020 and 31 January 2021. Employers will be able to claim the Job Retention Bonus after they have filed PAYE for January and payments will be made to employers from February 2021.

All employers will be eligible for the scheme. Full details on the applications process will be published by the end of September 2020.

Job Retention Bonus Information here.

TLT CJRS Guidance for Dealers

TLT Solicitors have put together guidance which is a reading for all employers whose businesses are affected by coronavirus.

The guidance includes:

  • What is included in ‘wages’ for the purposes of calculating the 80%
  • Clarifications on possible rotation of furloughed employees
  • Can employers re-hire staff to put them on furlough?
  • Considerations around holidays
  • How to limit the risk of discrimination
  • Timings of the scheme

Full guidance is available to NFDA members, please email nfda@rmif.co.uk to request a copy of the document