Coronavirus Job Retention scheme extended until March 2021

Coronavirus Job Retention scheme extended until March 2021

Coronavirus Job Retention scheme extended until the end of March 2021

Coronavirus Job Retention Scheme extended: In a statement to the House of Commons this afternoon (5 November), UK Chancellor Rishi Sunak confirmed that he will extend the furlough scheme until the end of March 2021. 

In a highly anticipated address during a Downing Street press conference over the weekend, Prime Minister Boris Johnson announced an initial extension of the furlough scheme as part of the government’s plan for the next phase of its response to the coronavirus outbreak.

Est. reading time: 2:00 minutes

Updated: 5 November 2020

Coronavirus Job Retention Scheme now open for applications until March 2021.

Following Prime Minister Boris Johnson’s recent announcement (31 October 2020) on further restrictions and UK Chancellor Rishi Sunak’s statement to UK Parliament this afternoon (5 November), the nationwide Coronavirus Job Retention Scheme will be extended until March 2021.

Under the initial extension announced over the weekend (31 October), the Government will continue to cover 80% of furloughed workers’ wages up to £2,500. However, the cost for employers of retaining workers will be reduced compared to the latest iteration of the scheme which ended on 31 October.

The scheme is open for all employees full or part-time who were on the employer’s PAYE payroll and on a Real Time Information submission to HMRC on or before 30 October. Further details on this will be released shortly.

The CJRS went live on 20 April 2020 to support businesses hit by the coronavirus outbreak (COVID-19) by ensuring employers can continue to pay wages for furloughed members of staff.

Initial alterations to the furlough scheme were subsequently announced on 12 June 2020. The full details of these changes are available via this link to the Government’s website Changes to the Coronavirus Job Retention Scheme.

Related | Practical ways to support employees through COVID-19

Another support measure, the Job Support Scheme, which was scheduled to be phased in on Sunday 1st November, has been postponed.

Extension clarifications

The extension to the CJRS mirrors the way the previous scheme operated, with businesses being paid upfront to cover the costs of wages.

  • The level of the grant will reflect levels available under the CJRS in August, so the government will pay 80% of wages, capped at £2,500, and employers will pay employer National Insurance Contributions and pension contributions only for the hours the employee does not work.
  • Similarly, as per the current CJRS, flexible furloughing and full-time furloughing are allowed.

Related | How to manage working capital and cash flow during a crisis

Additional information on the Chancellor’s latest announcement will be set out shortly, including how to claim this extended support through an updated claims service.

Updated (2 November): Application deadlines extended for government-backed loans

In addition to the changes to the duration of the furlough scheme, further announcements related to the extension of existing support packages were also unveiled on 2 November.

UK firms will have until 31 January 2020 to apply for other government-backed loans, including bounce back loans, coronavirus business interruption loans and the coronavirus large business interruption loan scheme. The extension also applies to the Future Fund, aimed at innovative UK startups.

(Image source: Matt Seymour on Unsplash)

Follow us on Twitter and join us on LinkedIn.