Coronavirus Job Retention Scheme extended to 30 September 2021

Coronavirus Job Retention Scheme extended to 30 Sept

To protect jobs and support businesses beyond the expected end of lockdown, the CJRS will now run for a further five months.

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Partner, KPMG Law

KPMG in the UK


As was widely trailed and welcomed the Coronavirus Job Retention Scheme (CJRS) has been extended until the end of September 2021. The scheme will continue in its present form until the end of June 2021 with a phased reduction in the level of funding from 1 July 2021.

How the scheme currently operates

Currently, participating employers can claim grants equal to 80 percent of a furloughed worker’s ‘reference pay’ for the hours they are on furlough. Grants for each employee are capped at £2,500 per month, an amount that is pro-rated where the employee undertakes some work in the relevant claim period.

This will continue to apply to claims for periods ending on or before 30 June 2021.

How the scheme will change from 1 July

For claim periods beginning on or after 1 July 2021, the grant will reduce to 70 percent of an employee’s reference salary with the monthly cap reducing to £2,187.50.

For claim periods beginning on or after 1 August 2021, the grant will reduce further to 60 percent of reference salary with the monthly cap reducing to £1,875.

Regardless of these prospective reductions, employees must continue to receive at least 80 percent of reference pay, subject to a monthly cap of £2,500, for their furloughed (i.e. non-working) hours.

From July 2021, the employer must therefore fund the difference between the reducing CJRS grants and the minimum furlough payments it is required to make to employees. If this requirement is not met, the entire grant related to an underpaid employee could potentially become repayable to HMRC.

Employers must also pay all associated employer’s NIC and pension contributions, as well as meet all costs relating to hours employees work.

What should employers who participate in the CJRS do?

Employers should think about how the extension to the CJRS will affect their return to work preparations over the next seven months, as the UK expects to move out of lockdown. In particular, they will need to consider how the additional furlough costs due to the reduction in the level of grants will impact those plans.

HMRC’s enforcement activity

The Government also announced they will invest over £100 million in a special task force of 1,265 HMRC staff to target fraud within COVID-19 support packages, including the CJRS. Whilst this focus is on illegitimate claims, the complex and evolving nature of the scheme since its introduction in March last year means it is important that employers generally ensure their CJRS claims are robust and supportable.

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