In order to avoid a “cliff-edge” resulting in widespread redundancies the chancellor announced a further extension of the CJRS scheme. The current version of the furlough scheme that started 1 November 2020 was scheduled to end on 30 April 2020. However, it has been extended until 30 September 2021. Also, the level of grant available to employers under the scheme will stay the same until 30 June 2021. Similar to last year, there will be a phased reduction in support to employers.
The CJRS furlough grant for May and June will remain at 80% of the usual pay for hours not working.
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 employers 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. Employers can choose to top up your employees’ wages for the hours not worked at your own expense.
The scheme will then be limited to 70% for July and then 60% for August and September. This phased reduction will operate in a similar way as in September and October 2020 with the employer being required to contribute the remaining 10% and then 20% of an employee’s regular pay so that they continue to receive 80% pay for furloughed hours.
In addition to the 10% and 20% contributions employers will continue to be responsible for paying employers national insurance and pension contributions on the full amount being paid to employees.
Wage caps are proportional to the hours not worked.
CJRS Updates and FAQ
CJRS eligibility from May
From May employers will be able to claim for eligible employees who were on their PAYE payroll on 2 March 2021. This means they must have made a PAYE Real Time Information (RTI) submission between 20 March 2020 and 2 March 2021, notifying HMRC of earnings for that employee.
You do not need to have benefitted from the scheme before to make a claim. You must meet the eligibility criteria.
Can I still use the CJRS if I’m reopening my business?
You can continue to use the CJRS if your business is affected by coronavirus. Employers don’t need to place all of employees on furlough. CJRS can be used flexibly to bring employees back to work for some of their usual hours. You can claim for a portion of the usual wage costs for the hours spent on furlough.
Can a CJRS grant be used to pay for holiday leave?
You can claim under the CJRS for periods of paid leave employees take while on furlough, including for bank holidays. Employers should not place employees on furlough just because they are going to be on leave.
If an employee is furloughed for only some of their hours, you can count time taken as holiday as furloughed hours, rather than working hours. This means you can currently claim for 80% of your employees’ usual wages when they’re on leave.
In line with the Working Time Regulations, if a furloughed employee takes holiday, employers should make sure they are calculating the correct holiday pay, and not simply continuing to pay the 80% they receive through the CJRS. You may need to top up employees’ pay to 100% of their normal hourly rate or salary.
Please contact us if you want an estimate of the claim or you need help in applying.