Tax Writer
Share this content

CJRS 2.0: Variable hours employees, making claims, and getting ready

More of your CJRS 2.0 questions answered from our experts from the Coronavirus response Q&A and Any Answers Live webinars.
26th Jun 2020
Tax Writer
Share this content
Signing contract
istock_sitthiphong_aw

It’s hardly surprising, given the reams of HMRC guidance and conflicting information on the definition of actual hours, that many AccountingWEB readers have been venting their frustration around how the revised Coronavirus Job Retention Scheme (CJRS 2.0) has been set up, labelling it a “complicated mess”.

We’ve considered CJRS 2.0 previously, taking guidance from our technical experts Kate Upcraft and Rebecca Benneyworth during last week’s Coronavirus response Q&A webinar and Helen Thornley, ATT technical officer, and Kirsty McGregor, founder of The Corporate Finance Network on Tuesday’s Any Answers Live webinar.

This article highlights more of your most asked questions from those two webinars.

Usual hours

The question of usual hours remains a headache, as there are conflicting sources of guidance as to how the calculation works. As the ICAEW has highlighted, there are currently three different answers to the question of what “Bob’s” usual working hours should be based on a 35-hour working week.

Although clarification is still needed from HMRC on this point, the below should help with CJRS 2.0 calculations (once the matter of usual hours is resolved).

How is the furlough claim calculated for variable hours employees who come back on flexi?

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

If they 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.

Upcraft: What is different under CJRS 2.0 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.

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?

Thornley: Logic tells you that they’re only working 50% but actually, it 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. I would always suggest you go through HMRC’s steps regardless. A lot of the time it will come out intuitively, but the times when it doesn’t, at least you know you’ve got it right.

What about zero-hours contract employees?

Thornley: They’re variable hour employees for the purposes of determining usual hours.

Making claims

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

Upcraft: 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.

McGregor: We need to see CJRS 2.0 as split into mini-schemes, one for each month.

Can more than one claim a month be made?

Thornley: 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.

Upcraft: 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.

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?

McGregor: 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.

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, Thornley’s and McGregor’s assumptions are that this is likely to be 30 November 2020 (i.e. 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?

As Upcraft has previously noted, under CJRS 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?

Upcraft: We’ve got to 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.

Getting ready

Kirsty McGregor also shared some practical tips to help firms and their clients get ready for CJRS 2.0:

  • Remind each client of the maximum number of employees they can claim for.
  • Employees require a new written agreement from their employer that confirms the new furlough arrangement. Make sure that your clients, as employers, have such a letter in place. A template is available via Kirsty’s Twitter account.
  • Come to practical arrangements with each client as to how they will take note of the hours their staff are working, and how and when those hours will be reported to you.
  • Agree when you will submit clients’ claims.

See also

We’ll be answering more of your questions on CJRS 2.0 in our next Any Answers Live webinar at 9am on Tuesday 30 June. See you then!

Replies (10)

Please login or register to join the discussion.

Caroline
By accountantccole
26th Jun 2020 15:20

Can we get one of these lovely summaries to cover redundancies, worked notice, PILON etc please

Thanks (1)
avatar
By Calculatorboy
27th Jun 2020 00:31

Just use whatever Is reasonable and consistent ,hmrc have said this,
I don't think they'll be worried about a few £ here or there ,
Considering the £bn 's they are pouring down the plug hole

Thanks (0)
Kirsty image
By Kirsty McGregor
28th Jun 2020 12:46

Great round-up Lucy!

Thanks (2)
avatar
By NYB
29th Jun 2020 09:42

As well as running a Payroll bureau and struggling with the whole caboodle I also have a ZERO hours contract mainly summer working. This"very big" travel company has told me they have the CHOICE of working out Furlough of either the average pay OR the monthly equivalent of last year. And they have CHOSEN to do the average. This does not work in my favour at all as the summer months earnings are much higher than the average. I have bombarded then with the HMRC rules and Treasury info.

Thanks (0)
avatar
By sugar
29th Jun 2020 09:50

Hi Lucy -
hmrc should have consulted experts like yourself b4 making a mess of what all this hours

what you or other have not clarified is -
an employee used to have normal hours of say 25 hrs pw in 2019/20 and has since Jan20 reduced her
normal working hours as 15hr pw
So what are her usual hr 25 or 15 - means if she works 5hr this JULY than furlough hours is 20hr
based on this employee is happy but employer has to pick extra cost from AUG SEP OCT ?
ANYONE CAN ANSWER WHAT I HAVE TO DO
tHANK YOU
sURESH

Thanks (0)
avatar
By whiteways
30th Jun 2020 10:18

I don't know any sole director one man band companies who record the hours they work.

What happens about them?

Thanks (1)
avatar
By happyface
29th Jun 2020 11:00

Hi,
Really confused with claiming periods. Just need some confirmation on claiming straddling periods on 4 weekly payroll. I submitted last 4 weekly claim from 18/5/20-14/6/20 on 3/6/2020. In order for me to claim the next 4 weekly claim, would the claims be as follows:
1) 1st claim: 15/6/20 to 30/6/20;
2) 2nd claim: 1/7/20 to 12/7/20.

Would really appreciate a response and confirmation on my pretty simple query.

Thanks (0)
Replying to happyface:
avatar
By NYB
29th Jun 2020 11:04

Yes. I have one with exactly same dates as yours. Cant do the second until 1st July or after. So could do two claims one after the other on Wewdnesday

Thanks (0)
Replying to NYB:
avatar
By SDJ82
29th Jun 2020 22:08

How are you going to work out the amounts to claim in each claim period from a single 4 weekly payrun spanning June and July?

Thanks (0)
Replying to SDJ82:
avatar
By NYB
30th Jun 2020 07:51

As per above apportion it out.

Thanks (0)