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CJRS Version 2.0: Variable hours employees, making claims and practical tips to get you ready

HMRC’s guidance for the CJRS is vast and somewhat confusing in parts. Usual Hours remains a headache as you can find conflicting HMRC guidance as to how the calculation works. Clarification is still needed from HMRC on “working hours” but here is a clearer picture of how to calculate variable hours employees and our practical tips to get you ready for CJRS version 2, flexible furloughing

Usual Hours – CJRS V2 Q1. How is the furlough claim calculated for variable hours employees who come back on flexi?

For variable hours employees you will need to look at what hours they worked in that same period last year and also their average working hours over the 2019/20 tax year. You pick whichever gives them the best answer and works in their favour.

If your employees come back on flexi, you have your “usual hours” based on what they did previously, and you have the actual hours that they have worked, and the difference is what you furlough.

CJRS Version 2.0?

Under CJRS Version 2.0, the difference is that whatever answer you choose for pay, you’ve got to use the same basis for hours. You can’t say “we’ll have corresponding hours and average pay” – there has to be a consistent approach to the two bits of the calculation.

CJRS V2 Q2. If an employee normally works 20 hours per week, and that employee returns for 10 hours a week, does that mean we divide the weekly average furlough pay by half and claim that?

Logic tells you that your employees are only working 50%, but it actually depends on the claim period. For example, if that’s a monthly-paid employee and you’re doing a monthly claim, you won’t automatically get the answer you were expecting. We would always suggest you go through HMRC’s steps regardless, that way you know you’ve got it right.

CJRS V2 Q3. What about zero-hours contract employees?

For the purposes of determining usual hours, zero-hours contract employees are classed as variable hour employees.

CJRS V2 – Making claims

Claims Q1. How do you treat straddling periods between months under CJRS 2.0?

Under the current guidelines, because they’re separate months, all the claims have to be separate. The July claims must be between the 1st July and 31st July, which means you can end up having to do lots of little claims to cover a calendar month if you’ve got weekly or four-weekly periods.

Claims Q2. Can more than one claim a month be made?

Yes! A claim should normally be for a minimum of seven days from 1 July. However, you do get these “orphan” periods as claims can’t cross calendar months from 1 July.

A claim can’t be for less than a week unless it’s for an “orphan” period, which is the end of a month or the beginning of a month.

Claims Q3. Are you still able to submit claims up to 14 days in advance under CJRS 2.0 or do you need to wait until the claim period has finished before making a claim?

Yes, you can claim up to 14 days in advance of your payroll, but just make sure that you know those are the final figures. You can wait until the scheme ends to put all your claims in as far as I’m aware, but it all comes down to cashflow.

Claims Q4. What are the deadlines for making a claim under CJRS 1.0 and 2.0?

Claims under CJRS 1.0, which ends on 30 June, must be made by 31 July 2020.

As to a deadline for submitting CJRS 2.0 claims, we assume that this is likely to be 30 November 2020 (ie one month after CJRS 2.0 finishes) but this is pending confirmation from HMRC.

Returning employees

How do you deal with employees returning from family-related / sick leave?

Under CJRS version 2.0, the number of employees that can be claimed for must not exceed the highest number of employees that were in any claim up to and including 30 June 2020.

However, there are exceptions, including employees returning from family-related leave after 10 June, even if you are furloughing them for the first time. Such employees are added to any previous maximum. Calculation of the furlough grant for these employees can be found here.

Note that this exception does not apply to those on sick leave.

What about National Minimum Wage and holiday pay?

You must make sure that the hours people are working are remunerated at least at the April National Minimum Wage. If you’re working, you’re back to your normal contract, unless you’ve had a contractual change that says your pay is changing.

[On holiday pay] Remember holiday pay is at normal pay, and normal pay changed as a calculation in April. So, where the rate of pay varies, we have to look back over 52 weeks to work out what that normal pay would be, discounting the furlough weeks and discounting holiday weeks. Also, we don’t look back 52 weeks in Northern Ireland because the law hasn’t changed, but we do in Great Britain.

Practical Tip for preparing for CJRS Version 2.0

  • Make sure you are aware of the maximum number of employees you can claim for
  • Employees require a new written agreement from their employer that confirms the new furlough arrangement. Make sure that you, as the employer, have such a letter in place
  • Speak to your accountant about how you will take note of the hours your staff are working, and how and when you will report those hours to your accountant (or payroll bureau)
  • Schedule a date for when you will submit your claims (or agree a date with your accountants or payroll bureau)

HB Accountants would like to thank Accounting Web for information used within this blog – their blog can be found here


HB Accountants are accountants for business – we are working hard helping our clients’ to make the right decisions for their business.

If you would like our help on financial, accounting or tax guidance and support, please contact Karen or Keith or call 01992 444466. 

More information on CJRS can be found in our earlier blogs below;

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The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors or omission or for any person acting on or refraining from acting on the information provided in the above

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