Furlough Scheme extended to March 2021

Only a matter of days after the Prime Minister announced on 31 October that the Coronavirus Job Retention Scheme (CJRS) was to be extended to 2 December 2020, Chancellor Rishi Sunak has today announced that the scheme will now be extended to 31 March 2021.

As part of a package of financial support for jobs and businesses, the extension of the CJRS will operate as follows:

• The scheme will pay up to 80% of employees’ wages for any hours not worked, up to a maximum of £2,500 per month for an employee who is fully furloughed. Employers will be required to pay employer National Insurance Contributions and pension contributions for the hours not worked. This equates to the grants payable under the CJRS in August of this year.
• The extended scheme is planned to run from 1 November 2020 to the end of March 2021, but will be reviewed in January to decide whether employer contributions should be increased.
• The scheme will be open to all employers, regardless of whether or not they have claimed under the CJRS before, and in respect of any employee, even if they have not previously been furloughed. Employees must have been on the employer’s PAYE payroll by 30 October 2020 in order to be furloughed. Employees who were on an employer’s payroll on 23 September 2020 and who were made redundant or stopped working after that date, can be re-employed and furloughed.
• Employees can be fully or flexibly (part time) furloughed under the scheme, but employers must agree the proposed working pattern with employees and record it in writing. There is no minimum furlough period, but the period claimed for must be for a minimum claim period of seven days.
• Employees who are shielding in line with public health guidance, or who have caring responsibilities, can be furloughed.
• Employers will be able to make a claim under the scheme from 11 November and any claims relating to November must be made by 14 December 2021.  Claims up to and including 31 October must be made by 30 November.
• The previously announced Job Retention Bonus will no longer be paid in February. The expectation is that a retention incentive will be redeployed “at the appropriate time”.
• The previously announced Job Support Scheme will not be introduced for the time being.

The Government has published a new policy paper setting out the main details of the scheme, and the basic principles applying to the calculation of claims, with full guidance expected to be published on 10 November 2020.