Corporate Tax Partner Blick Rothenberg
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CJRS: Rubik’s cube of public and private funding

Nurseries, dentists and some schools are caught in a conundrum of how to restrict their CJRS application to wages funded only from their private income, which can involve some challenging maths.     

18th May 2020
Corporate Tax Partner Blick Rothenberg
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Untangling the CJRS calculations for mixed public-private revenue streams
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The coronavirus job retention scheme (CJRS) provides a government subsidy of up to 80% of wages (subject to a cap of £2,500 a month) for businesses that decide to furlough their employees as a result of COVID-19. Kate Upcraft’s article explains how to get the details right for furlough claims

In recent AccountingWEB coronavirus Q&A webinars, however, members have asked several times for clarification about how the furloughing calculations should be done when the organisation earns a mixture of paid fees and public grants.

Public funding

For employers who receive public funding for staff costs, and where that funding is continuing, HMRC’s guidance says it expects “employers to use that money to continue to pay staff in the usual fashion – and correspondingly not furlough them”. 

However, where organisations are “not primarily funded by the government and whose staff cannot be redeployed to assist with the coronavirus response” HMRC acknowledges that the CJRS may be appropriate for some staff. The guidance does not specify how the scheme should be applied in these circumstances, and many employers in relevant sectors have struggled to determine whether they can claim, and if so, how much they are entitled to.

Practical application

The basic principle is that an organisation which is already receiving public funds should not claim additional public funding under the CJRS. However, this can be difficult to apply in practice. 

Organisations likely to be affected will include children’s nurseries, some schools and certain businesses such as dentists that have a mix of private and NHS patients.

More detailed guidance has been published by the Department for Education (DfE), which says that where providers receive part of their funding from public sources and part from private income, they can furlough employees whose pay, as a proportion of their total pay bill, reflects the proportion of their funding that is private.  

For example, if the average monthly income is 40% from public funds and 60% from other income, CJRS support could be provided for up to 60% of the payroll costs (limited to 80% of that cost, so 48% overall). This would mean calculating the salaries of staff the employer wants to furlough and ensuring that their wages are no more than 60% of the overall payroll bill. This could be difficult to apply in practice, for example if the staff who need to continue to work are primarily more junior (or more senior) staff within the team.  

The DfE guidance gives additional information for employers in different types of organisations, including early years providers, children’s social care providers, schools and further education colleges. In each case, the principle is first to ensure that essential services remain open (such as nursery or school provision for the children of key workers), and to use the CJRS only where workers are not needed and would otherwise be made redundant or laid off.

Where specific workers cannot be identified who are privately-funded (for example, staff in a particular department), then the payroll bill for which a CJRS claim is made should be the appropriate proportion of the total costs.

For example, if a school has a separate private income stream (such as catering or sports facilities lettings), they may decide to furlough staff that are typically paid from that income. The CJRS grant will be in line with the proportion of its payroll costs which are funded by the private income. If there is more than one private income scheme they do not need to be considered separately, but can be aggregated.


Many dental practices provide both NHS and private services. NHS England has clarified that mixed practices can claim for furloughed workers in respect of private income, and still receive their NHS income. The amount of money claimed should be in proportion to the private income of the practice.

The British Dental Association (BDA) has commented that practices may choose to furlough each member of staff for a proportion of the period. So, for example, if private income is 33% of total income, each member of staff could be furloughed for one month and paid as normal for 2 months, out of a three month period.

This is a slightly different approach to that recommended for schools or nurseries, but presumably reflects the fact that the practice is likely to be closed and so it may be more equitable to furlough all staff for a proportion of the relevant period of closure.


The position for businesses that receive a proportion of their income through public funds will be complex, but the basic principle is that they should only use the CJRS where necessary, in respect of the private proportion of their payroll costs.

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