In his budget statement this afternoon, Chancellor Rishi Sunak included an announcement that the Coronavirus Job Retention Scheme (CJRS) would be extended until 30 September 2021.
The CJRS had been due to close at the end of April, and so the decision should help employers around the country sustain the employment costs of furloughed employees whilst the economic impact of the pandemic and the national lockdown persists.
This extension will be welcome news for employers who have been relying on the CJRS throughout the pandemic.
Employers will remain able to use the scheme to claim 80% of furloughed employee’s wages (up to the existing cap of £2,500 per month) for hours that they do not work. Employers will still be required to pay national insurance contributions and employer pension contributions on furlough pay.
For those businesses utilising flexible furlough - where employees are paid by their employer for working part-time hours whilst the employer uses the CJRS to pay for any furloughed hours - employers will still be required to pay employees their normal wages for working hours.
From July 2021, the CJRS will become more expensive for employers, with a requirement to contribute 10% to employees’ wages for unworked hours, rising to a contribution of 20% in August and September 2021.
You can read more on the existing rules of the CJRS, which this announcement builds on, and how the scheme operates in our previous articles:
We will continue to watch out for further government announcements in relation to the CJRS. You can stay updated on the latest news by checking our website.
If you would like further information on the extended CJRS or help with effecting furlough agreements or changes, please contact our Employment Team on 0161 941 4000 or email The Employment Team for more information.