UK - Coronavirus Job Retention Scheme Extended

By Alison Dixon, Charles Hill, Tim Spillane, Elizabeth Lang, Ian Hunter


Previously set to expire on 31 October, the Coronavirus Job Retention Scheme (“CJRS”), commonly known as the ‘furlough scheme’, has now been extended until March 2021 as a result of new national lockdown measures. The launch of the Job Support Scheme (“JSS”) has been postponed.

In addition, in view of the extension to the CJRS, the Job Retention Bonus (“JRB”) will no longer be paid in February 2021, on the basis that the policy intent of the JRB (to keep people in work until 31 January 2021) no longer applies. A retention incentive “will be deployed at the appropriate time”.

The Treasury has announced that the extended CJRS will operate until the end of March 2021. It will be reviewed in January 2021 to decide whether economic circumstances are sufficiently improved to ask employers to increase their contribution to furloughed employees’ pay. Full details will be included in guidance to be published on 10 November 2020.

Who can claim?

All employers with a UK bank account and who operate UK PAYE schemes are eligible to claim. Treasury guidance states that the scheme is aimed at employers who cannot maintain their workforce because their operations have been affected by Covid-19. HMRC intends to publish details of employers who make claims under the extended CJRS scheme, starting from December 2020.

There is no requirement for an employer to have previously used the CJRS, or an employee to have previously been furloughed, in order to be eligible.

Which employees are covered?

To be covered, employees must have been on the employer’s PAYE payroll by 30 October; the employer must have made an RTI submission on behalf of the relevant employee between 20 March and 30 October 2020.

The extended CJRS allows for “flexible furlough”, meaning that employees are able to work part-time, with the employer then claiming the grant for hours not worked. Each furlough claim will have to correspond to a consecutive seven-day period, therefore employees can be rotated on and off the scheme, but not for periods of seven days or less.

Employees who are shielding, who need to remain at home with someone who is shielding or who have caring responsibilities resulting from coronavirus (including those who have to look after children) can be furloughed, but furlough is not intended for short term sickness absence.

Employees employed and on the payroll on 23 September 2020 who stopped working for their employer afterwards can be re-employed and claimed for, provided an RTI submission was made for them between 20 March and 23 September 2020.

Arrangements for furlough must be confirmed to the employee in writing and employers must make any necessary changes to the employment contract by agreement.

How much can be claimed?

As under the CJRS in August, until 31 January 2021 the Government will contribute 80% of furloughed employees’ wages, up to a cap of £2,500 per employee per month. Employers are able to top up employees’ wages above this amount, if they wish to do so. Employers will pay National Insurance Contributions and pension contributions only for the hours that the employee does not work.

This is a more generous allowance than under the CJRS during September and October, when the Government’s contribution to employee wages was tapered and employers would, in some instances, be required to contribute 20% of their employees’ salary.

How to claim?

As with the previous iterations of the CJRS, employers should continue to pay employees normally for hours worked and submit claims in respect of unworked hours. Working arrangements will need to be agreed with the relevant employees and employers should keep a record of any arrangements on file, so that these can be provided to HMRC if necessary.

Employers will be able to claim from 8am on 11 November 2020.

If you had previously intended to make arrangements for employees under the JSS, and now wish to make use of the extended CJRS, you will need to ensure that affected employees are properly notified and that the new arrangements are agreed and appropriately documented. If you require assistance in making any of these arrangements please don’t hesitate to get in contact with a member of our HR Services team.