Job Retention Scheme changes announced for application from 1st February 2021

Treasury Direction made under Sections 71 and 76 of the Coronavirus Act 2020

The Chancellor Rishi Sunak has issued to HMRC the 6th Treasury Direction in relation to the Coronavirus Job Retention Scheme and Job Retention Bonus.

This sets out the calculation rules for the Job Retention Scheme from 1st February 2021 and extends the scheme until the end of April 2021.

CJRS ‘lookback’ calculations for variable pay

As a result HMRC has clarified how the CJRS “lookback” calculation for variable pay should apply next month (February), as the leap year in 2020 means fewer days in February 2021 than 2020. They have also addressed some concerns raised about the fact that looking back 12 months from March and April 2021 may reference periods where pay was reduced because of furlough.

February 2021 look back and 2020 leap year

To minimise disruption for employers and agents, HMRC will accept that February 2021 claims for employees with variable pay and a monthly payroll may be based on either the full amount earned in February 2020 or 28/29ths of that amount (to reflect the leap year). HMRC will not challenge either approach.

March/April 2021 look back to use 2019

They have also noted concerns raised that the lookback period from March 2021 might include periods for which a CJRS claim was submitted in 2020, leading to a lower reference salary.

This direction notice and HMRC guidance will confirm that the lookback periods for March 2021 and April 2021 claims of the Job Retention Scheme for those employed and reported at 20th March 2020 will be March 2019 and April 2019.

Further guidance, including example calculations, are expected shortly.

PAYadvice.UK 26/1/2021

4 thoughts on “Job Retention Scheme changes announced for application from 1st February 2021

  1. Hi, do you know if they will change the date aswell? You will receive furlough pay if you was employed before the 31 of October, my new employment start on the 1st November 2020 do you know if i will be entitled of the furlough scheme?
    Basilio Giuffre

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