In his Spring 2021 Budget, the Chancellor announced that the Coronavirus Job Retention Scheme (CJRS) will be extended for a further five months from May until the end of September 2021.
Chancellor Rishi Sunak said the scheme – which pays 80% of employees’ wages for the hours they cannot work in the pandemic – would help millions through “the challenging months ahead”.
As a result of the CJRS being extended to 30 September 2021, there will be several potential scenarios for Employers to consider, including:
Where an employee was furloughed under a written furlough agreement entered into before 31 October 2020 which remains in force, it may be possible for the previous furlough arrangement to simply continue after that date.
The requirements of a valid furlough agreement under the fifth Treasury direction are the same as previously under the third Treasury direction (see paragraph 7.1, fifth Treasury direction) and at this time there is no requirement for the agreement to be entered into on or after 1 November 2020. The only requirement is that it is entered into before the period to which the claim relates (paragraph 7(c)(i)). Assuming the eligible employer and qualifying employee requirements continue to be met (which also remain substantially the same under the fifth Treasury direction, see paragraphs 4 and 6), it may be possible for furlough to continue under a previous furlough agreement.
However, it is likely that some amendment will be required to most furlough agreements in order for the arrangement to continue after 30 April 2021.
As the employee was not furloughed previously, the employer should enter into a detailed furlough agreement with the employee and the employee should be asked to sign and return the agreement to confirm their agreement to be furloughed in accordance with the terms of the CJRS. This could be done electronically.
The agreement should be made before the CJRS period to which it relates starts.
The Chancellor announced that the Self-Employment Income Support Scheme (SEISS) is also being extended with a fourth grant covering the period February to April 2021 and a fifth and final grant covering May to September 2021.
There will be temporary continuation of tax exemptions for COVID-19 tests and home office expenses, and of the Statutory Sick Pay (SSP) Rebate Scheme while sickness levels remain high.
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