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Job Retention Scheme is extended to end of March 2021

The government’s Coronavirus Job Retention Scheme (the furlough scheme) has been extended until the end of March 2021.
Who will be eligible for furlough?

To be eligible for the scheme, employees must have been on the PAYE payroll on 30 October 2020. That means a Real Time Information (RTI) submission notifying payment for that employee to HMRC must have been made between 20 March 2020 and 30 October 2020.

Employers can claim under the scheme even if they have never used the CJRS before or have not furloughed the employees in question before. When the furlough scheme was last extended, a cap was imposed which meant employers could not claim for more people than they had furloughed previously. We don’t yet know whether that cap still applies and await clarification from the government.

The further extension to the end of next March was announced by the Chancellor in the House of Commons on 5 November 2020. The key points are:

  • Employers can claim 80% of employees’ salaries, up to £2,500, taking the scheme back to the level it was at in August before greater employer contributions were required in September and October.
  • The scheme will be reviewed in January 2021 to see if economic circumstances have improved enough to ask employers to contribute more, which means the 80% government contribution may not last for the duration of the extension.
  • Employers will still have to pay National Insurance and employer pension contributions.
  • The Job Retention Bonus due to be paid out for employees retained after furlough until the end of January, has been put on hold.
  • The self-employed income support grant for the period from November to January has also increased from 55% to 80% of average profits, up to £7,500.

The government has released a policy paper setting out some of the details of the furlough scheme extension, which says that full guidance will be published on 10 November 2020.

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