Following the UK government’s announcement on 22 February 2021 of an exit roadmap of the current lockdown and phased relaxation of social distancing rules, the UK Coronavirus Job Retention Scheme (CJRS) will be extended by a further three months until the end of September 2021.
It is anticipated that all social distancing rules will be void in June 2021; however, to mitigate the economic impact of the current rules and to safeguard jobs, the CJRS will enable workers to be paid up to 80 percent of a worker’s normal salary for hours not worked, beyond the lifting of restrictions.
The rules of the CJRS will remain mostly unchanged by the extension, except tapering of employer contributions will be reintroduced. In summary, from 1 July 2021 employers must make increasing contributions to furloughed workers’ wages in respect of hours not worked (as outlined below).
Workers will continue to receive up to 80 percent of their normal pay, subject to the CJRS cap of £2,500 per month. Employers must still cover employer National Insurance and pension contributions for those hours not worked and operate tax withholding on any grant in the usual way.
Tapered Employer Contributions
The grant claimed through the CJRS will then be reduced from the first of each month after 30 June 2021 until 1 August 2021, with a proportionate reduction in the CJRS cap, as set out in the table below.
| Phase-out periods | Employer liability for furloughed workers | Level of grant claimed under CJRS |
| Until 30 June 2021 | Employer NICs and pension contributions | 80% of wages, subject to the CJRS cap |
| 1 July to 31 July 2021 | (a) 10% of wages subject to a cap of £312.50 for unworked hours; (b) Employer NICs; and (c) Pension contributions. | 70% of wages, subject to a monthly cap of £2,187.50 for unworked hours |
| 1 August to 30 September 2021 | (a) 20% of wages subject to a cap of £625 for unworked hours; (b) Employer NICs; and (c) Pension contributions. | 60% of wages, subject to a monthly cap of £1,875 for unworked hours |
Taxpayer Protection Taskforce
The UK government also announced a £100 million Taxpayer Protection Taskforce to scrutinise claims made under business support schemes designed to help companies and workers struggling with the economic impact of the COVID-19 pandemic. For more information about the Taxpayer Protection Taskforce, please access McGuireWoods’ recent Subject to Inquiry article.
Self-Employment Income Support Scheme
The UK government further announced that a fifth grant will be available under the Self-Employment Income Support Scheme (SEISS) in respect of the period May to September 2021.
The UK government broadened the qualification threshold to enable more self-employed people to be eligible under the SEISS, so where self-employed persons’ turnover has fallen by at least 30 percent, they will be eligible to claim under the SEISS up to the cap of £7,500. Self-employed people whose turnover has decreased by less than 30 percent will be eligible for a grant under the SEISS, up to a cap of £2,850. Claims for the fifth grant can be made in July 2021.
The fourth grant under the SEISS runs from February 2021 until April 2021. The grant will cover up to 80 percent of a self-employed person’s trading profits up to the SEISS cap.
For advice in relation to the extended CJRS, its operation or to associated issues — for example, compliance with discrimination law in respect of decision-making around furloughing workers — please contact Dan Peyton or Adam Penman.
For advice in relation to auditing claims made under a business support scheme and how to rectify mistakes or to discuss associated concerns, please contact Francesca Titus.