On November 5th, chancellor Rishi Sunak announced that in accordance with the new lockdown the coronavirus Job Retention Scheme (CJRS) will be extended until the end of March 2021.
This announcement provides businesses and people across the UK with reassurance that they will in fact receive further support over the coming months. The extension of the furlough scheme will also contribute to saving millions of jobs across the nation.
With the extension in place employees will now be able to receive 80% of their salary for hours they are not able to work. Whilst businesses are only being asked to cover any national insurance and employer pension contributions.
The Job Retention Scheme was originally set to finish on the 31st October after payments had been reduced from 80% of employee’s salary to 60%.
Following a recent announcement from the treasury the new Job Support Scheme that was predicted to begin on November 1st will now be postponed until the job retention scheme is able to come to an end.
Originally the job retention scheme had only been extended to the 2nd of December as this is when the national lockdown is predicted to be lifted. However, the government have confirmed that they will further their support to help businesses recover as well as providing them with certainty over the coming months. This extension follows evidence from the first lockdown proving that the economic effects are much longer lasting for businesses than the duration of restrictions.
As it currently stands businesses do not have to contribute to the payment of any hours not worked. Employers have only been informed that they have to cover national insurance and any employer pension contributions for those hours. This payment will total up to be on average 5% of total employment costs.
However the lack of contribution from employers for the coronavirus job retention scheme is not guaranteed, it will be reviewed in January to determine if the economic circumstances have improved enough for employers to be able to make contributions.
With thanks to the CJRS and other schemes in place the government has been able to protect lives with an astonishing £200 billion support package. With the furlough scheme contributing to saving over 9 million jobs across the nation.
Since 1992, D E Ball & Co Limited is an independent business advisory service based in Telford, Shropshire. With their advisors working with businesses in the agriculture, services, construction and retailer sectors, they have a broad span of knowledge to offer. To see find out more about D E Ball: https://www.deball.co.uk/