In today’s Budget announcement (3 March), the Chancellor of the Exchequer, Rishi Sunak, has confirmed that the Coronavirus Job Retention Scheme (CJRS) will be extended until 30 September 2021.
It would otherwise have come to an end in April 2021, but with lockdown restrictions only just starting to be relaxed, the extension of the furlough scheme is intended to allow the economy time to recover. The scheme aims to ensure that businesses do not feel compelled to make difficult decisions about the future of their employees owing to the coronavirus.
Under the extended scheme, employees will continue to receive 80% of their wages capped at £2,500. Until the end of June 2021, this will be funded entirely by the government.
From July 2021, employers will be expected to pay 10% towards the cost, rising to 20% in August and September. Employers will also have to continue payment of national insurance and pension contributions.
It will still be possible for employees to be flexibly furloughed, so that they can work some of their usual hours and placed on furlough leave for any hours they do not work.
Employers will be required to pay staff in full for any hours that they do work, and the cost of this cannot be claimed under the furlough scheme.
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