Coronavirus Job Retention Scheme (CJRS) Extended

On Thursday (5 November) the government released further details about the Coronavirus Job Retention Scheme (“CJRS”) extension, also known as the furlough scheme, which will now remain open until 31 March 2021.

Additional guidance in relation to the extension of the scheme is to be released on 10 November, but this is what we know so far:

  • Employers will receive support from the government which will cover 80% of the furloughed employee’s wages (up to £2,500 per month) for hours not worked. This is the level of support that employers were receiving during August, with employers being required to pay employer NICs and pension contributions only, although employers are still able to choose to top up employee wages above the scheme grant if they wish.
  • Neither the employer nor the employee needs to have previously used the CJRS.
  • HMRC will publish details of employers who make claims under the extended CJRS scheme, starting from December.
  • To be eligible to be claimed for under this extension, employees must have been on the employer’s PAYE payroll by 23:59 30th October 2020.
  • Employees that were employed and on the payroll on 23 September 2020 who were made redundant or stopped working for their employer afterwards can be re-employed and claimed for where they have been included within a PAYE Real Time Information (RTI) submission to HMRC from 20 March 2020 to 23 September 2020.
  • For all employees who were eligible under the original CJRS scheme even if a claim has not previously been made, the CJRS calculation should continue to be based on 80% of the usual wages and usual hours as calculated under the CJRS scheme to 31 October.
  • Where an employee was not previously eligible for CJRS, the calculation will take account of updated reference periods. The employer must have made a PAYE Real Time Information (RTI) submission to HMRC for these employees between 20 March 2020 and 30 October 2020. For newly eligible employees, 80% of wages (capped at £2,500) should be calculated on:
    • For fixed-rate employees – the wages payable in the last pay period ending on or before 30 October 2020
    • For variable pay employees – the average payable between 6 April 2020 (or start date if later) and the day before their furlough begins.
  • Usual hours, still based on calendar days, will be
    • For fixed rate employees the contracted hours worked in the last pay period ending on or before 30 October 2020
    • For variable pay employees the average hours worked between 6 April 2020 (or start date if later) and the day before they were furloughed
  • The extended CJRS will operate as the previous scheme did, with businesses being paid upfront to cover wages costs. However, CJRS claims should be submitted by 14th of the following month under the extended scheme, so claims up to 30 November have to be claimed by the 14 December.
  • Employees can still be flexibly-furloughed under the extended scheme i.e. it can be agreed that employees will work reduced hours and be furloughed for the hours not worked.
  • When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of 7 consecutive calendar days.
  • The Job Support Scheme has been replaced by the extended CJRS scheme for the time being.
  • The Job Retention Bonus will no longer be paid in February 2021 – this will be replaced by a new “retention incentive” which will be deployed at an “appropriate time”.
  • Furlough agreements may be backdated to 1 November 2020 however these contract changes have to be issued by 13 November 2020.
  • The level of wage support the government will provide is to be reviewed in January 2021.

What do employers need to do now?

You must review any furlough agreements you currently have in place as these may need to be amended. For example, if the furlough agreement states that the employee will remain on furlough until 31 October at the latest, you should ensure the agreement is updated accordingly to reflect the new furlough arrangements.

If you already have a Job Support Scheme Agreement in place with any of your employees, you should contact them as soon as possible to update them regarding the government’s decision to extend the furlough scheme and obtain their written agreement to remain on furlough / flexible furlough.

If the announcement of the national lockdown means that unfortunately your business will have to close from 5 November until 2 December, meaning that employees you have been able to bring back to work in recent months (or employees you have not previously furloughed) will have to be furloughed, you will need to ensure new furlough agreements are in place with these employees and determine the pay due to them.

ACAS has furlough template letters available online which you may find useful.

As users of the extended CJRS scheme will be published by HMRC, some businesses may be put off making claims given that this information will be publicly available and may impact on reputation.

The withdrawal of the Job Retention Bonus could have a substantial impact on many businesses that have projected this income in their cashflow modelling.

The claim submission deadline of 14 days following the end of the month could cause difficulties for some businesses.

Contact us

For further advice, please contact one of our specialists:

Alastair Wilson –
Clair Williams –
Rachael Matthewson –