Job Retention Scheme

Updated on 19 April 2023

The coronavirus (COVID-19) outbreak is having far-reaching financial impacts on individuals and businesses across the UK, and indeed across the world. 

This page sets out some information for employers about the Coronavirus Job Retention Scheme. 

The scheme closed on 30 September 2021. However, this page is retained as reference information for any employers needing or wanting to check their claims. For important information on what comes next for employers now that the Job Retention Scheme has ended, please see our news article. 

Illustration of a man surrounded by question marks


The Job Retention Scheme, set up in March 2020, helped employers pay their workers’ wages if they were unable to work during the coronavirus crisis. As well as situations where the business had to close or temporarily reduce its capacity, this could also include workers who:

  •  had caring responsibilities resulting from coronavirus, such as caring for children who were at home as a result of school or childcare closing, or
  •  were clinically extremely vulnerable, or in the highest risk group for severe illness from coronavirus (even though ‘shielding’ came to an end some time ago).

Under the Job Retention Scheme, you could claim a grant so that a ‘furloughed’ worker could receive up to 80% of their usual wages, via the payroll, up to a total of £2,500 each month.

These grants are taxable income for employers in business, however they should be offset by the employment costs that you deduct when calculating taxable profits for Income Tax /Corporation Tax purposes. Note, there is a box to tick on page 8 of the 2020/21 Self Assessment Tax Return to confirm that these payments have been included as taxable income for the purposes of calculating your profits.

You can read more about reporting your grants in our news article ‘What comes next now that the CJRS has ended?’.

The Job Retention Scheme closed down on 30 September 2021.

Treasury Direction and guidance

The underlying scheme rules (the ‘Treasury Directions’) can be found on GOV.UK.


The government's guidance on the Job Retention Scheme, to help you check your claims, is split over a number of pages, all of which can be found in the collection on GOV.UK.

The guidance on how to deal with the accrual of holiday leave and pay during furlough, can be found on GOV.UK.

The Pensions Regulator also issued guidance for employers on the pension element of the Job Retention Scheme grant.

Our colleagues at the CIOT have produced a useful summary of the different guidance available and answers to some questions put to them.

Employment law

There was a useful guide to furloughing workers from an employment law perspective on the ACAS website.

The main thing to note was that the employment relationship continued through the furlough period and you continued to have certain obligations – for example, workers may have continued to accrue holiday

Incorrect calculation/claim?

We understand that a lot of employers will have got their calculations of furlough pay/grant amounts wrong, particularly in the early stages of the scheme when there was a lot of confusion about what the rules were.

There are obvious issues if an employer pays out too much by way of furlough pay (as they will have paid out more than they could legitimately claim for under the Job Retention Scheme) but there may also be serious ramifications where they did not pay out enough by way of furlough pay (that is, where they have paid out less than the ‘reference pay’ as calculated under the scheme rules). Indeed, it could mean that the employer was not actually eligible to make a claim for a grant from the Job Retention Scheme at all!

If you are out of time to claim a further amount of grant (see below) and you discover an underpayment of furlough pay to an employee for this period, which under the scheme rules you have an obligation to make good, this may have to come from your own pocket. You must make good any shortfall to employees within a ‘reasonable period’ as confirmed in our news article ‘What comes next now that the CJRS has ended?’.

In summary:

If you have underclaimed a grant in the period to 31 October 2020, there is now nothing you can do about this.

If you have underclaimed a grant from 1 November 2020, you must have amended it by the amendment deadline for the relevant month:

To amend a claim for

You must amend the claim by 11.59pm on

November 2020

29 December 2020

December 2020

28 January 2021

January 2021

1 March 2021

February 2021

29 March 2021

March 2021

28 April 2021

April 2021

28 May 2021

May 2021

28 June 2021

June 2021

28 July 2021

July 2021

31 August 2021

August 2021

28 September 2021

September 2021

28 October 2021

HMRC may accept amendments after these dates if there is a reasonable excuse for the failure to make the amendment in time. More information about reasonable excuse can be found in our news article Coronavirus Job Retention Scheme (CJRS): a brief update for employers.

We understand the online claim system will be taken down on 28 October 2021. People who have a reasonable excuse, that want to make an amendment to a claim, will need to ask HMRC to process this manually after this date.

If you have overclaimed a grant, you may need to pay some money back to HMRC. You used to be able to reduce your next claim by the overclaimed amount, although as the Job Retention Scheme is now closed, this is no longer possible). You can find HMRC's guidance on what to do, on GOV.UK.

HMRC have recently clarified that they are content for employers to offset over and underclaims for different employees in the same period, so that you only have to repay any net overclaim to HMRC. HMRC give an example in their guidance. We explain more about offsetting in our news article ‘What comes next now that the CJRS has ended?’.

Note, that the deadline for notifying HMRC about any overclaimed amounts of grant from before 22 July 2020 that employers haven’t managed to pay back 'informally', was 20 October 2020. The deadline for notifying HMRC about any subsequent overclaimed amounts (that haven’t been paid back ‘informally’ is 90 days from the date you received the overpaid grant.

If you do not meet the ‘notification’ deadlines, you may have to pay a penalty, as set out in this HMRC factsheet.

The factsheet is quite confusing, but our understanding of the penalty position in respect of failing to notify HMRC that you need to repay some grant monies within the relevant time limit, is as follows:

  • A new law has been passed that specifically means employers who knew their JRS grant was incorrect at the time they received it, and who haven’t repaid it/who don’t notify within the relevant timeframe, will be treated as having made a deliberate and concealed failure to notify (of the over claimed grant). They can be charged a penalty of up to 100% of the amount over claimed as at the end of the notification period.
  • Those who didn’t know their JRS grant was incorrect at the time they received it, and who don’t notify within the relevant time frame, will fall under general ‘failure to notify a liability’ principles, and will only face penalties if the amount of overpaid grant has not been repaid by 31 January 2022.

Further details of the penalty situation are available in a comprehensive article looking at correcting JRS claims, from our ATT colleagues. This article also confirms that HMRC will usually expect employers to pay back what they owe 30 days after the notification has been made. If employers do not do this, or do not engage with HMRC about paying, then HMRC may issue an ‘assessment’ to claw back the amount due.

If an overpayment has been received by an employer (and has not been paid back informally), but HMRC has not made an assessment, employers must detail the overpayment on their Self Assessment tax return. Note, there are boxes on page 5 of the 2020/21 Self Assessment tax return to enter any grant amounts that you have to pay back and that you haven’t already told HMRC about. Amounts entered will be added to your income tax liability that you need to pay by 31 January 2022.

There is more information about this in our news article ‘What comes next now that the CJRS has ended?’.

Note that to the extent that you paid your employee an amount which you now need to pay back to HMRC, you need to think very carefully before attempting to claw an amount back from your employee.

Whilst there is no automatic right for an employer to recover such monies from an employee under the law governing the JRS scheme, the Employment Rights Act 1996 does allow employers to make deductions from an employee’s future wages to recover overpayments of wages made by mistake, which may apply. We explain more in our news article: Need to pay back a Job Retention Scheme (JRS) grant? What employers should – and shouldn’t – do.

Now the CJRS has come to an end, we expect that HMRC will be checking some claims. HMRC have said that they are concentrating their compliance activity on those who they think have been abusing the system and that they will not be actively looking for cases where the employer has simply made an innocent error. Our colleagues at the ATT, set out what this might mean here.

All employers, at the very least, will need to keep records for six years, supporting the grants they have claimed, in case HMRC want to check them.

Update September 2022

We have now seen the first case on HMRC clawing back CJRS grants.

At the same time, we have been working with HMRC to identify common scenarios in the calculation of CJRS grants, and whether they give rise to errors which require correction. HMRC have now provided us with the attached guidance, which we are sharing on their behalf.

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