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UK Government Extends Furlough Scheme Until 31 March 2021

November 06, 2020

The United Kingdom has announced a second extension to the country’s Coronavirus Job Retention Scheme (CJRS) in less than a week. The CJRS will now run until 31 March 2021, with some revised details compared to the previous versions of the scheme.

UK Chancellor Rishi Sunak announced on 5 November 2020 that the Coronavirus Job Retention Scheme (CJRS)—also known as the furlough scheme—will be extended until 31 March 2021. This follows the UK government’s announcement on 31 October that the scheme was to be extended for one month only until December 2020, as it was originally due to end on 31 October 2020. As we reported in our most recent LawFlash, these recent changes have been made in conjunction with a new “stay at home” mandate starting on 5 November 2020. We recently reported that the successor scheme to the CJRS, the Job Support Scheme, was being postponed. With this newest extension of the CJRS, the Job Support Scheme will now be postponed until at least 1 April 2021.

Revised Details of Extended CJRS

The UK government has not yet issued full guidance in relation to the CJRS extension, but this is expected on 10 November 2020. In advance of that date, HM Revenue & Customs has published this policy paper, the details of which are summarised below.

The following details are no different from the plan laid out by the government on 31 October 2020:

  • The government will pay employees 80% of their salary for hours not worked (up to a maximum of £2,500).
  • Employers will be able to “furlough” employees on a full-time or part-time basis.
  • Employers will only have to pay for employees’ National Insurance and employer pension contributions (for all of the salary, whether the hours are worked or not).
  • Employees cannot do any work for their employers whilst on furlough.
  • There is no minimum or maximum period for which an employee can be subject to the CJRS.

The government’s 80% contribution will continue until at least 31 January 2021. The government will review its contribution to employees’ salary for hours not worked in January 2021 based on the economic situation at the time (with Brexit due to occur on 1 January 2021). This mirrors the government’s approach earlier this year when it temporarily reduced its contribution toward the CJRS.

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Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

London
Matthew Howse
Pulina Whitaker
Louise Skinner
Lee Harding