Chancellor confirms extension of furlough scheme until September 2021
As expected, the Chancellor Rishi Sunak yesterday (3 March) confirmed the extension the Coronavirus Job Retention Scheme (CJRS) from the end of April 2021 until the end of September 2021.
The level of grant will remain the same until the end of June 2021, with the relief then tapering until the end of the Scheme in September.
The current CJRS allows an employer to place an employee on furlough and apply for a grant to cover wage costs for the time an employee is on furlough.
- can claim 80% of ‘usual salary’ for hours not worked, up to a maximum of £2,500 per employee (pro-rated for hours not worked) per month
- needs to fund employer National Insurance contributions (NICs) and the minimum employer automatic enrolment pension contributions.
From 1 July 2021, the level of grant will be reduced and employers will be asked to contribute towards the cost of furloughed employees’ wages. To be eligible for the grant an employer must continue to pay furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough.
The reduction in the level of the grant means that the percentage recovery of furloughed wages will be as follows:
- for July 2021 70% of furloughed wages up to a maximum of £2,187.50 and
- for August and September 2021 60% of furloughed wages up to a maximum of £1,875.00.
Employers will need to continue to fund employer NICs and mandatory minimum automatic enrolment pension contributions.
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.
If you have any immediate questions about the information contained in this article, please do not hesitate to get in touch:
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