Coronavirus Job Retention Scheme 

Extension of CJRS Furlough Scheme to 30 September 2021

The current version of the furlough scheme that started on 1 November 2020 was scheduled to end on 30 April 2021. In order to avoid a “cliff-edge” with resulting widespread redundancies the chancellor has announced a further extension of the scheme and also a phased reduction in support to employers. The CJRS furlough grant for May and June will remain at 80% of the employees’ usual pay for hours not working but it will then be limited to 70% for July and then 60% for August and September.

This phased reduction will operate in a similar way as in September and October 2020 with the employer being required to contribute the remaining 10% and then 20% of an employee’s regular pay so that they continue to receive 80% pay for furloughed hours. In addition to the 10% and 20% contributions employers will continue to be responsible for paying employers national insurance and pension contributions on the full amount being paid to employees.

Eligible employees must have been the subject of an RTI submission (FPS) between and 20 March 2020 and 2 March 2021, it is possible that newer employees who were not eligible for the existing furlough may become eligible from 30 April 2021.


Employees, including company directors who are carrying out no work can, by agreement, be furloughed and the government will pay 80% of their pay up to £2,500 per employee a month. In the case of directors they must carry out no work except statutory duties (i.e. preparing/filing accounts etc). A claim must be submitted for the grant via a portal opening on 20th April 2020

This is available to all sectors operating PAYE not just the leisure/retail/hospitality sector that has been so badly affected.

Employer’s immediate action plan re job retention:

  • Plan the next few month’s likely workload and employee time requirements
  • Consider which key staff will be required when the business is back to normal, consider if you would offer to top up furlough pay
  • Check employment contracts for a clause re lay-off, reduced hours, change of status
  • Get advice on the contract if needed, negotiate and notify employees of any furlough
  • Where employees are furloughed state in writing that they will do no work and then save written confirmation of the employee's acceptance of that for 5 years.
  • Secure short term cashflow until the funding is received (likely mid/late April)
  • Notify HMRC and claim the grant - portal will open on 20th April 2020.

We cannot advise on employment law so specific advice should be taken on this and we can refer you to WBW Solicitors who we work with.

What is “furloughed”?
This is another term for lay-off, basically it means a temporary period in which the employee is not working or carrying out any duties but is still kept on payroll.

How much is the subsidy?
Up to 80% of salary can be claimed back, up to £2,500 per employee.   

Can the employer top up, must they top up to 100%?
Employers are not obliged by the government to top up but they may wish to. 

Can I just make someone furloughed?
Check employee contracts, if there is no provision for a furlough period/change of status you will need to consult with employees, it is expected most employees would opt for furlough rather than redundancy. We cannot advise on contracts so speak to a specialist if required, we can refer you. 

Generally there will be no provision for sending an employee home on less pay so care must be taken so there is no unlawful deduction of wages/breach of contract/unfair dismissal.

Where the contract is silent/does not provide for furlough you may be advised to consult employees and issue a letter to employees giving their options of redundancy/unpaid leave/furlough at 80%.  Redundancy pay and notice periods may apply if redundancy route is chosen, speak to us for a calculation. If employer cannot pay statutory redundancy the employee may have recourse to make a claim form the government.

Latest guidance states that it must be agreed in writing by the employer/employee that no work will be carried while on furlough. We suggest an email stating that to employees, with an acceptance reply back from the employee should be saved as best practice and saved for 5 years.