Support for businesses through the Coronavirus Job Retention Scheme

Furlough Scheme confirmed to run until end of September 
The Job Support Scheme has been paused during this period.

Under the Coronavirus Job Retention Scheme, all UK employers will be able to access support to continue paying part of their employees’ salaries for those employees that would otherwise have been laid off during this crisis.


See our quick guide to help you apply here.

EXTENSION:

the government’s Coronavirus Job Retention Scheme (CJRS) – also known as the Furlough scheme – will remain open until September 2021, with employees receiving 80% of their current salary for hours not worked, up to a maximum of £2,500.

Employers will be expected to pay 10% towards the hours their staff do not work in July, increasing to 20% in August and September. Employers will need to continue to fund employer NICs and mandatory minimum automatic enrolment pension contributions. 

The Chancellor has also extended eligibility for the scheme. For periods starting on or after 1 May 2021, employers can claim for employees who were employed on 2 March 2021, as long as a PAYE Real Time Information (RTI) submission was made between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee. 

Under the extended scheme, the cost for employers of retaining workers will be reduced compared to the current scheme, which ends today. This means the extended furlough scheme is more generous for employers than it was in October.

As part of the revised scheme, anyone made redundant after 23 September can be rehired and put back on furlough.

In addition, business premises forced to close in England are to receive grants worth up to £3,000 per month under the Local Restrictions Support Grant.

How this scheme has worked during 2020:

HMRC will pay employers a grant worth 80% of an employee’s usual wage costs, up to £2,500 a month plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage up to the 31st July 2020. This is to safeguard workers from being made redundant.

From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back part time. This is a month earlier than previously announced to help support people back to work. Individual firms will decide the hours and shift patterns their employees will work on their return, so that they can decide on the best approach for them – and will be responsible for paying their wages while in work.

From August 2020, the level of government grant provided through the job retention scheme will be slowly tapered to reflect that people will be returning to work. That means that for June and July the government will continue to pay 80% of people’s salaries. In the following months, businesses will be asked to contribute a modest share, but crucially individuals will continue to receive that 80% of salary covering the time they are unable to work.

The scheme updates mean that the following will apply for the period people are furloughed:

  • June and July: The government will continue to pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
  • August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
  • September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
  • October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

    If your business needs short term cash flow support, you may be eligible for a Coronavirus Business Interruption Loan Scheme

See further government information on the Coronavirus Job Retention Scheme here: guidance for employers. They have also published guidance for employees.

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