Originally introduced in March, the Coronavirus Job Retention Scheme (CJRS) – commonly known as furlough – was created to prevent mass redundancies as the Covid-19 pandemic wreaked havoc with our health, hospitals and economy.


It had been announced that the scheme would close at the end of October and make way for the Jobs Support Scheme, which would continue to support struggling firms but ease the financial impact on the State.


However, with an estimated two million people still on furlough and a second lockdown putting many more jobs at risk, Chancellor Rishi Sunak made the bold move to extend the CJRS scheme once again.


So, what does it mean for your business?


How long is the scheme being extended for?


The Government previously resisted calls from unions and other groups to extend the scheme and support businesses struggling against Covid-19 measures, however as part of the announcement of a second England-wide lockdown, it was confirmed that furlough will now run until the end of March 2021.


The policy and its extension will be reviewed once again in January.


Will it be any different to the original scheme?


In recent months, firms have had to top up furloughed wages by 20%, with the Government contributing 60%. The extension will, however, bring the scheme back to its original terms.


From November 1st, the Government will pay the full 80% of furloughed employees wages, with the employer only needing to contribute pension and National Insurance contributions. Employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month.


Who can be furloughed?


To qualify for furlough, employees must have been on the company payroll by October 30th, 2020. However, it doesn’t matter if they are full-time, part-time, agency, flexible or zero-hour contracts.


Employees do not need to have been furloughed in the first round of the scheme to qualify for the extension, and can take other jobs while placed on leave as long as it doesn’t breach the rules of their contract.


Firms who made redundancies and cuts when the funding was announced to end have also been considered – employees who were on the payroll on September 23rd and subsequently stopped working can be re-employed and claimed for by companies.


How do I claim?


Employers will be able to claim for the CJRS from 8am on Wednesday, November 11th, 2020. Claims can be made in anticipation of an imminent payroll, at the point payroll is run or after it has been processed. There will be a short period when the system for claims is updated, and businesses must claim in arrears for this period.


Full guidance to claim is set to be published on November 10th.


For more business support, contact our team on info@chuhanandsingh.co.uk or call 01642 244090.