Furlough scheme extended to 2021

November 27th 2020

As you will be aware the UK wide Coronavirus Job Retention Scheme has been extended until 31 March 2021. But what are the key details for employers to know?

The extended Coronavirus Job Retention Scheme (CJRS) offers a more generous level of support than the last few months, with the government paying 80% of an employee’s usual salary for hours not worked, up to a monthly £2,500 cap, until 31st January 2021. Employers only need to cover employers’ NI and pension contributions, plus normal pay for hours actually worked. The government will review the policy in January 2021 to decide whether to “ask employers to contribute more”. The £2,500 cap is proportional to the hours not worked.

To be eligible for the extended CJRS, employees must have been on your PAYE payroll on 30th October 2020, but they don’t need to have been furloughed before, and neither do you need to have previously used the CJRS. You can claim whether your business is open or closed. Other than that, the scheme runs very much as it did before.

You again need to seek employees’ agreement, confirmed in writing, to furlough or flexible furlough. Where you intend to claim from 1st November, retrospective agreements are only valid if they were in place by 13th November 2020.

For claim periods starting on or after 1st December 2020, you cannot claim for any days on or after that date during which the employee was serving a contractual or statutory notice period (and this also includes those serving notice of resignation or retirement).

The Job Support Scheme remains postponed and the Job Retention Bonus won’t now be paid in February 2021, but the government will redeploy a retention incentive “at the appropriate time”.

Redundant staff can also benefit from the CJRS. Employees on your payroll on 23 September 2020, but who subsequently stopped working for you, can also qualify for the extended CJRS if you re-employ them – but you are not obliged to do so.

For claims periods to 31st January 2021, employees receive 80% of their usual pay for hours not worked, up to a maximum of £2,500 per month, paid for by the government. You only need to cover employers’ NI and pension costs.