Christmas holiday, Christmas bonus and the Coronavirus Job Retention Scheme

As part of his update from Thursday 17th December 2020, Jim Harra of HMRC has provided the following clarifications.

Can I use CJRS to pay for holiday leave?

If employers have furloughed employees because of the effect of coronavirus on their business, they can claim under the CJRS for periods of paid leave they take while on furlough, including for bank holidays such as Christmas Day or Boxing Day.

If an employee is flexibly furloughed, you can count any time taken as holiday as furloughed hours rather than working hours. This means you or your clients can claim 80% of their usual wages for these hours. Employers should not place employees on furlough just because they are going to be on paid leave.

If a furloughed employee takes holiday, their employer should top up their pay to their normal rate in line with the Working Time Regulations. For more information search ‘check if you can claim for your employees’ wages’ on GOV‌‌‌‌‌.UK.

Can I include a Christmas bonus in my calculation for the grant?

You or your clients can claim for regular payments that you are contractually obliged to pay your employees, including compulsory commission, fees and overtime.

However, you or your clients cannot claim for discretionary commission, non-contractual bonuses (including tips) and non-cash payments. For more information search ‘steps to take before calculating your claim’ on GOV‌‌‌‌‌.UK.

I hope this information helps you and your business…

Yours faithfully


Jim Harra

Chief Executive and First Permanent Secretary – HMRC

Holiday and furlough – the options

For more details on the options of applying the rules, the PAYadvice article Christmas, Holidays and Furlough provides details and links to the relevant government guidance. Since publication, this article has proved to be the most popular with thousands of hits.


There is some significant misunderstanding of the rules for holiday pay and compliance with the law, both from an aspect of the Working Time Directive and the Employment Right Act, but even more with requirements of Furlough under the a Coronavirus Job Retention Scheme.

Can employees be furloughed across Christmas if they would normally have been on leave anyway? Simply the answer is yes if they were being furloughed for other reasons already under a further agreement.

However, an employer should not just choose to furlough an employee purely because they were going on annual leave alone.

PAYadvice.UK 18/12/2020

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