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New Reference Periods for the Coronavirus Job Retention Scheme (CJRS)

on Friday, 05 February 2021.

The legal framework extending the CJRS until April 2021 has been issued in the form of a new Treasury Directive. The Directive covers the CJRS from 1 February 2021 to 30 April 2021.

Read our previous article here. 

There are a few changes that employers need to be aware of from the last Treasury Directive that was issued. By way of a reminder, the following positions, which were outlined in the 5th Treasury Directive, remain unchanged:

  • No change to the amount employers can claim - Employers will continue to be able to claim for 80% of an eligible employee's salary, capped at £2,500 per month in respect of hours not worked.  
  • HMRC to continue publishing information about employer's claiming under CJRS - The first information on claiming employers was published on 26 January 2021. This will continue to happen for all employers claiming under the CJRS unless the employer makes an application to request that their details are not published. Further information on this can be found here.
  • Employees on notice - Employers still cannot claim under the CJRS for an employee who is working their notice period.

Calculating Reference Periods

The main change that employers need to be aware of is how to calculate the reference salary for employees who have a variable salary and how to calculate the usual working hours for an employee with variable hours.

Reference Salary

The CJRS will have been running for a year by March 2021. This means that there is potential that an employee could have been furloughed in the corresponding month in 2020, therefore it would not be possible to use the corresponding month in the previous year as the reference point for their salary. Therefore, the Treasury Direction makes it clear that, to calculate furlough pay in March and April 2021 for employees who do not have a fixed rate, the corresponding month should refer to the employee's pay in March and April 2019 (not March and April 2020). However, when calculating that employee's furlough pay for January and February 2021, the corresponding calendar month in 2020 should be used.

Reference Period for Usual Working Hours

For employees who have variable hours, for the 'calendar lookback' method, the following updates are applicable:

  • The Treasury Direction removes reference to salary periods and calendar days occurring in the 2019-2020 tax year, which has been amended to "the relevant reference month calendar days" and "the relevant reference month salary periods". The relevant reference month is March 2019 for a March 2021 claim, and April 2019 for an April 2021 claim.
  • Where a non-fixed rate employee was not employed in March or April 2019, only the averaging method of calculating usual working hours can be used.

The above changes have been incorporated into the Government's guidance which can be found here. The guidance contains some practical examples of how the reference periods operate.

Coronavirus guidance employers


For advice in relation to any claims made under the CJRS, please contact Michael Halsey in our Employment Law team on 07554 432829 or complete the form below.

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