Coronavirus Job Retention Scheme extended until October

Chancellor of the Exchequer Rishi Sunak has confirmed the UK Government’s intentions to extend the Coronavirus Job Retention Scheme for furloughed employees until the end of October.

The scheme will be unchanged until the end of July, with a phased approach from August to October transferring the cost of supporting the scheme from the state to employers.

From July onwards, employees who can safely return to the workplace in a COVID-secure environment will be able to do so on a part-time basis. Currently, the scheme only provides subsidies for workers who are furloughed and unable to work.

While the Government appears ready to support those returning to part-time work in the coming months, employers will have to contribute toward salaries at this point so that furloughed employees would continue to receive up to 80% of their wages, capped at £2,500 per month until the end of October.

Coronavirus Job Retention Scheme timeline 

June and July 

• The CJRS will continue as before with no employer contribution required. 
• The government will pay 80% of furloughed staff wages, up to a maximum of £2,500.  
• At the same time, the new Flexible Furlough will start in July, one month early. 

August 

The taxpayer contribution to employees wages will stay at 80%. 
Employers will be asked to cover National Insurance and employer pension contributions (which, for the average claim to date, accounts for just 5% of total employment costs). 

September 

• From September, employers will be asked to contribute 10% towards staff salaries with taxpayers paying the other 70%. 

October 

• Taxpayers will pay 60%, and employers will contribute 20%. 
• The scheme will then close on 31st October. 

HMRC has also updated their guidance and have said the scheme will close to new entrants from 30th June.

After this point, an employer will only be able to furlough their employees that they have been furloughed for a full three-week period, which must have arisen before 30th June.

This effectively means that the deadline to furlough an employee for the first time will be 10th June, in order for the current three-week furlough period to be completed by 30th June. HMRC also announced that employers will have until 31st July to make any claims in respect of the period to 30th June.

So far, the Job Retention Scheme has provided financial certainty for over 7.5 million employees who have been furloughed across the country.

The scheme has enabled almost one million businesses in all industries to receive vital financial aid that will enable them to resume trading as the UK takes “baby steps” out of the COVID-19 lockdown announced on 23rd March.

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Date published 12 May 2020 | Last updated 29 May 2020