Chancellor Rishi Sunak has just revealed the 2021 Budget, and with it comes a vast amount of change and support for businesses.
As more than 700,000 people have lost their jobs and with the UK economy shrinking by 10%, Sunak stated that he will do ‘whatever it takes’ during the pandemic to aid the UK economy.
Describing yesterday’s statement as the first step in the long road to recovery, the Chancellor added: “It’s going to take this country, and the whole world, a long time to recover from this extraordinary situation.”
One of the key areas of focus from the Budget announcement, is the extension of the Coronavirus Job Retention Scheme (CJRS) – this has now been expanded to 30th September 2021.
Of note for employers, is the phased approach from hereon in, to the support for businesses and individuals – read below for more details:
Furloughed employees will continue to receive 80% of their usual salary for hours that are not worked, capped at £2,500 gross per month until 30th September 2021.
Employers are eligible to claim for the furloughed salary as follows:
- 1st November 2020 – 30th June 2021
80% of furloughed salary, capped at £2,500 per month
- July 2021
70% of furloughed salary may continue to be claimed under the CJRS scheme, but the 10% delta must then be funded by the employer
- 1st August – 30th September
60% of furloughed salary may continue to be claimed under the CJRS, but the 20% delta will be funded by the employer
- The employer continues to be responsible for 100% of the salary, in addition to employer NIC (National Insurance Contributions) and pension contributions, for the hours that employees work.
Eligibility criteria to the scheme continues to apply, and the key highlights are set out below:
- For the period 1st November – 30th April 2021, employees that the employers are claiming for, must have been employed and on the employer’s PAYE payroll on 30th October 2020; an RTI submission for them for payment of earnings must have been made to HMRC between 20th March 2020 and 30th October 2020.
- From 1st November 2020, employers are able to furlough employees who have not been previously furloughed.
- Employees made redundant since 23rd September 2020 can be re-employed and included within the claims process, if they were on the payroll at 23rd September 2020, and were included in an RTI submission between 20th March and 23rd September 2020.
- The eligibility criteria for the period from May to September 2021, will be announced in due course.
As previously set out, employers must inform the employees that they are placed on furlough in writing. To minimise risks, employers should seek explicit consent from the employee via an agreement as this constitutes as a change of terms and conditions and reduction in pay.
Given the rapid changes seen recently, this article and information is accurate at the time of writing and may change as the situation develops.
The team at IRIS HR Consulting are fully conversant with changes as they are announced and are able to support employers with guidance as needed. If you have any queries or would like to know more, please contact us at IRIS HR Consulting.