Job Retention Scheme Extension
The Coronavirus Job Retention Scheme (CJRS) available to employers who have been affected by COVID-19 has been extended until the end of September 2021. This is good news for employers who are still affected by the lockdown restrictions and other measures but have been able to ensure their staff members’ continued employment by using the scheme to claim furlough payments.
The scheme currently pays 80% of an employee’s wages up to a £2,500 monthly cap for hours not worked, as well as covering pension contributions and employers NIC. However, the amounts that can be claimed will see a gradual reduction starting from 1st July 2021.
Changes to CJRS
- For the period 1st of July to 31st of July, the scheme will pay 70% of an employee’s wage up to a £2,187.50 monthly cap for hours not worked. However, the employer themselves will be expected to cover pension contributions and employers NIC as well as the remaining 10% of an employee’s wages for hours not worked, bringing the total payment up to 80%.
- For the period 1st of August to 30th of September, the scheme will pay 60% of an employee’s wage up to a £1,875 monthly cap for hours not worked, with employer continuing to pay pensions contributions and employers NIC and now expected to pay the remaining 20% of an employees wages for hours not worked.
Unless there is another revision of the scheme or further lockdown measures announced between now and the 30th of September, it is expected the scheme will end from this date and no further money will be available from the government to furlough employees. For employers currently using the scheme, this should provide a reasonable amount of time to plan ahead.
Who can use the scheme?
The scheme is open to all employers who had a registered and active PAYE scheme on or before the 30th of October 2020, even if they have not previously used the CJRS. Any employee who meets the criteria of ‘employee’ for income tax purposes is eligible to be furloughed under the CJRS, as long as they on the relevant PAYE payroll on or before the 2nd of March 2021. If you are not sure if you can claim, HMRC has provided a step by step guide to check your eligibility.