The UK’s Job Retention Scheme

Although the government’s Job Retention Scheme (JRS) was originally expected to close on 31 October 2020, the government subsequently decided to extend it, initially to the end of March and then to the end of April 2021 (the extended JRS).

The extended JRS largely reflects the JRS terms that applied in August 2020. Employers can place employees on furlough (temporary leave of absence) on a full time or flexible basis. They can claim 80% of usual monthly wage costs in respect of employees’ unworked hours from HMRC, subject to a cap of £2,500 per employee per month. The cap is pro-rated for staff on flexible furlough to reflect the hours they are not working. Employers must pay employer NICs and autoenrolment pension contributions on the sums paid.

This note outlines how the extended JRS will operate until the end of April. Although the government had intended to review the terms of the JRS in January 2021 to assess the level of support businesses continue to require, that review will no longer take place.

The extension of the JRS means that the government will not pay a Job Retention Bonus to eligible employers in February 2021 as originally planned.

Read more: The UK’s Job Retention Scheme

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