Furlough Scheme Extended Until End of September

Furlough Scheme Extended Until End of September

The Coronavirus Job Retention Scheme (CJRS), which was due to end in April, will now be extended until the end of September.

Today Chancellor Rishi Sunak has announced that the CJRS will be extended until the end of September 2021 for all parts of the UK.

“We will continue doing whatever it takes to support the British people and businesses through this moment of crisis.”

 

– Chancellor Rishi Sunak

Earlier it was announced that the UK Government would pay 80% of employees’ usual wages for hours not worked, up to a cap of £2,500 per month for claim periods running to 30‌‌‌ April 2021. Today the Chancellor has confirmed that the UK Government will continue to pay 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, up to the end of June 2021.

For periods in July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875.

Employers will need to continue to pay their furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. This means, for periods between July and September, employers will need to fund the difference between this and the CJRS grants themselves. They can also top up wages above the 80% if they wish, but they are not required to do so.

Employers must continue to pay the associated Employer National Insurance contributions and pension contributions on subsidised furlough pay from their own funds.

CJRS eligibility from May

For periods from 1‌‌ ‌May 2021 onwards, employers will be able to claim for eligible employees who were employed by them and were on their PAYE payroll on 2 March 2021. This means employers must have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying HMRC of earnings for that employee.

Employers and their employees do not need to have benefitted from the scheme before to make a claim, as long as they meet the eligibility criteria.

For more information on the extension to the scheme and the support available, one can search ‘Job Retention Scheme’ on GOV‌‌‌.UK.

This article first appeared in My Taxes Plus.

Image by bnenin / Adobe Stock

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Karen Wilkinson works at London School of Finance and Law and writes articles on UK tax law for My Taxes Plus and MILESTONES | in business magazines.