January is the tenth month of the Coronavirus Job Retention Scheme. It’s now been in place for so long that it’s easy to start to forget the basics that you became familiar with in Spring 2020. In particular, we’re seeing quite a few businesses understandably confused about the £2,500 monthly cap on the claim for an employee.
The confusion comes where someone is only furloughed for part of the month. If that’s the case, then the £2,500 cap is reduced accordingly. So, if someone was furloughed on 13 January, and remained furloughed for the remaining 19 days of the month, the cap for them is 19/31 x £2,500, which is £1,532.
It’s easy to see why that’s necessary and appropriate if you stretch it to its logical conclusion. If there was no such cap, someone could be furloughed for a single day in January and, provided their salary was £37,500 a year or greater, £2,500 could be claimed for them for just that one day! Instead, £80.65 is the most that can be claimed.