COVID-19: Furlough extended to 30 September 2021

In his March 2021 Budget, the Chancellor has announced that the Coronavirus Job Retention Scheme (CJRS) will be extended to 30 September 2021.

This is welcome news for employers, many of whom are not yet able to reopen, and it should assist them to retain employees, pending the anticipated easing of lockdown restrictions over coming months.

The terms of the CJRS largely remain as before but, importantly, tapering has been reintroduced from July 2021 onwards, requiring employers to make a contribution to the grant. This means:

  • Furloughed employees’ entitlement to receive 80% of their wages, up to £2,500 per month, is unchanged;
  • Employers will be eligible to claim a grant under the CJRS in respect of those 80% salary costs for the time that an employee is on furlough. Employers will otherwise pay employees as normal for the hours they actually work;
  • Employers will continue to be responsible for paying NICs and mandatory pension contributions on all payments to employees;
  • From 1 July 2021, the financial liabilities on employers will increase, with employers being required to  contribute 10% towards their furloughed employees’ salary costs.
  • From 1 August 2021 until 30 September 2021, the employer contribution will increase to 20%.

It remains to be seen whether 30 September 2021 will ultimately be the end of the road for the CJRS. Previous multiple extensions suggest that the government may continue to be flexible with its support for businesses and adapt to the prevailing COVID-19 situation. For now, at least, however, employers have some certainty which will assist with business planning over the next few months.

Government guidance will be updated to reflect these changes and employers should therefore ensure they keep up-to-date with the latest information.

Useful links