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Budget 2021: Furlough scheme extended to 30 September 2021

03/03/2021

At a glance

As part of his ongoing commitment to protect jobs and livelihoods in the UK, the Chancellor has announced in this year’s budget that the Coronavirus Job Retention Scheme (CJRS) that was scheduled to close on 30 April 2021, shall be extended to 30 September 2021. This will enable employers to place or keep employees on furlough beyond the proposed end date of the government’s “roadmap” out of lockdown.

Our employment team provides a reminder and summary of the key features of the CJRS extension, below.

Key features of the extended CJRS

  • Until 30 June 2021, HMRC will pay up to 80% of the usual monthly wages of employees who are not required to work (‘furloughed’) or only required to work part of their normal hours (‘flexibly furloughed’). This is capped at £2,500 per month for each employee.
  • From 1 July to 31 July 2021, HMRC will pay 70% of wages with employers being required to pay 10%, to make up 80% of total wages.
  • From 1 August to 30 September 2021, HMRC will pay 60% of wages with employers being required to pay 20%, to make up 80% of total wages.
  • Details of the caps that will apply to HMRC’s contributions from 1 July 2021 are awaited, but these are anticipated to mirror those introduced in the tapering of the scheme in September and October of last year, suggesting a reduction in the monthly cap on wage payments for each employee from £2,500 to £2,187.50 for July 2021, and then to £1,875 for August and September 2021.
  • Employers will be responsible for paying flexibly furloughed employees for the hours that they work as normal, together with employer National Insurance contributions and pension contributions for the hours that the employee does not work. Employers can choose to top up wages of furloughed or flexibly furloughed employees to full pay, if they wish.
  • The CJRS is available for all employees that were on the employer’s PAYE payroll before midnight on 30 October 2020. We await guidance on whether this date will be extended.
  • There is no requirement for employers to have previously used the CJRS.

If you have any queries about the CJRS extension, please get in touch with your usual Memery Crystal contact or the authors below.

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