The Chancellor announced an extension to the Coronavirus Job Retention Scheme (“CJRS”) in today’s Budget to support businesses and employers as the economy reopens.
The CJRS was due to end 30 April 2021 but will now operate for a further five months until 30 September 2021. Furloughed employees will continue to receive 80% of their current salary for hours not worked, up to a maximum of £2,500 per month.
Employers are currently only required to pay for employer National Insurance contributions and pension costs, this will remain the case until 30 June 2021. From July 2021, employer contributions will increase to include 10% of the cost of furlough hours, rising to 20% in August and September 2021 as the economy reopens.
We expect that further guidance and an additional treasury direction will be published on the CJRS extension in due course. An article covering the current CJRS guidance can be read here.
Alex Payton comments:
“The extension of the CJRS will be welcome news for businesses, who may still be subject to lockdown restrictions or yet to see demand return to pre pandemic levels. Although employers will have to contribute more to the cost of furloughed hours as the economy gradually reopens in line with the route out of lockdown, those additional costs will not kick in until July 2021, at which point it is hoped that increased economic activity will assist employers shoulder the extra costs burden.”
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