The Chancellor announced yesterday (17 December 2020) that the already extended Coronavirus Job Retention Scheme (CJRS) will be extended once again until 30 April 2021.

Previously, the level of the government’s contribution was to be reviewed in January 2021, sparking concerns that this might be reduced. However, the review has taken place earlier to allow businesses to plan for 2021 and it has been confirmed that the government’s contribution will remain at the current level.

What does this mean for employers?

Employers will remain able to claim 80% of an employee’s wages, up to the cap of £2,500 per month, for hours not worked.

Employers will still be required to pay national insurance contributions and employer pension contributions on furlough pay.

Who is eligible for the CJRS?

The eligibility criteria for the CJRS remains unaffected by the government’s additional extension. By way of brief re-cap:

  • Employees must have been on the PAYE payroll on 30 October 2020 to be eligible.
  • Those employees made redundant after 23 September 2020 can also be re-employed and placed on furlough leave.
  • Employers can seek to furlough an employee regardless of whether they were previously furloughed and seek to rely on the scheme, even if the employer has not previously used the CJRS.
  • Flexible furlough can still be used, by agreement. This means that employers can pay employees for working agreed part-time hours whilst also relying on a furlough grant to pay employees for their unworked/furloughed hours. Any such agreements should be agreed and set out in writing.

Business Loan Scheme

It has also been announced that there will be an extension to the government-guaranteed Covid-19 business loan schemes until the end of March 2021.

Further guidance

The government’s guidance on the CJRS will be updated in due course. For any queries in the meantime, you can reach our Employment Team on 0161 941 4000.