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Coronavirus Job Retention Scheme
16 Jun

Changes to the Coronavirus Job Retention Scheme (CJRS)

On 3 March 2021, at the Spring Budget, the Chancellor confirmed that the Coronavirus Job Retention Scheme (CJRS) will run until 30 September 2021. The current scheme is the third iteration of the original scheme that commenced back in March 2020. The previous iterations had original end dates of 31st December 2020 and 31st March 2021, before a further extension to the CJRS was introduced due to continued restrictions as the pandemic evolved.

Outline of the current scheme

Under the current rules, employers must pay their furloughed employees a minimum of 80% of their wage for the hours they have not worked during a claim period. The government contributes 80% to the cost of unworked hours up to a maximum of £2,500. Employers can choose to top up their employees’ wages beyond the 80% minimum, however this is at their own expense.

Employers’ are required to meet the employer National Insurance contribution and pension contribution costs, and there is no government contribution towards this.

As under previous schemes, employees must not do work for their employer during furloughed hours. Employees who continue to work will put their employer’s claims at risk and employers should take steps to actively ensure that employees are not working during furloughed hours.

Coronavirus Job Retention Scheme

Changes to the scheme from July 2021

From July 2021, employers will continue to be required to pay furloughed employees a minimum of 80% of their wage for unworked hours, however the government contribution will decrease to 70%, up to £2,187.50, towards the cost incurred for those hours. This means that the employer will be required to contribute the 10% difference, up to £312.50, to make up the total.

Employers’ will continue to be responsible for meeting the liabilities for employer National Insurance contributions and pension contributions for their employees.

Changes to the scheme from August 2021

From August 2021, the requirement to pay furloughed employees a minimum of 80% of their wages for hours not worked remains, and the government contribution will at this stage decrease to 60%, up to £1,875, of the costs incurred for those unworked hours. The employer will therefore be required to contribute 20%, up to £625, to ensure the full 80% is paid for the hours claimed under the CJRS.

There will be no change to employers’ responsibility to make payments of employer National Insurance and pension contributions.

The government contribution does not change in September 2021 as the CJRS draws to a close. Therefore the guidance as stated above for August will be the final change to government contribution levels.

Employee eligibility

To include an employee in a claim for furlough, the employer must have included that employee on their payroll by specific dates. Being included on the payroll means that HMRC has received an RTI submission reporting a payment to the employee by the employer by the required date.

For claims start after 1 May 2021, employees must have been on the employer’s payroll (i.e. a payment of earnings must have been notified to HMRC) for the employee at some point between 20 March 2020 and 2 March 2021.


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