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Furlough and Job Retention Scheme (CJRS) extended until 31 October 2020

 

Chancellor of the Exchequer Rishi Sunak, has extended the Government’s furlough scheme by four months until the end of October 2020 meaning that support will be provided for a total of eight months. The scheme was first launched in March and had been due to close at the end of June 2020.

This extension is in a bid to support people back to work in a ‘measured way’ post lockdown and the current scheme will continue unchanged until the end of July 2020.

As a reminder, the maximum grant is calculated per employee and is the lower of 80% of an employee’s regular wage and £2,500 per month PLUS the associated employers’ NI contributions (NIC) on this amount and the minimum auto enrolment employer pension contributions on that wage. Fees, commission and bonuses should not be included. This provides a maximum cap of £2,500 plus £245 (employers’ NIC) plus £59 (auto-enrolment pension contribution) so a total possible grant of £2,804.

Under the existing scheme furloughed employees cannot work, however from the start of August, furloughed workers will be able to return to work part-time with employers being asked to pay a percentage towards the salaries of their furloughed staff. The employer payments will substitute the contribution the government is currently making so the employee will continue to receive 80% of their salary.

Further details on how employers will be asked to contribute will be delivered by the end of May.

We are continuing to monitor guidance concerning the measures affecting both you and your business and shall update you with further information as it is released.

Disclaimer from Morris & Co

Please note this is the guidance as we understand the legislation at the current time. As you will appreciate it is changing almost on a daily basis and we cannot be held responsible if advice and guidance changes or if our interpretation does not subsequently prove to be correct.