What is the Coronavirus Job Retention Scheme?

On 20 March 2020, the Chancellor announced a package of support for businesses affected by the coronavirus (COVID-19) crisis, including grants available under the Coronavirus Job Retention Scheme.

The scheme is intended to support employers maintain their workforce where their operations have been severely affected by the coronavirus crisis, or where employees are unable to work because of circumstances resulting from the crisis.

Under the scheme, if a worker is designated as a "furloughed worker", a grant is available from HM Revenue and Customs to reimburse the employer for a proportion of the wage costs relating to the worker. From 1 November 2020, the scheme covers 80% of the furloughed worker's wages for the hours they do not work, up to a maximum of £2,500 per month. The employer is responsible for paying the employer national insurance contributions (NICs) and pension contributions. Employers will be required to pay a proportion of the employee's wages during July, August and September 2021.

The scheme was due to close at the end of October 2020, but has been extended until 30 September 2021.

Up until 1 July 2020, the worker was required not to perform any work for the employer while on furlough. From 1 July 2020, employees can perform some work for the employer under a flexible furlough arrangement.

Employers do not have to top up the worker's wages so they are paid in full, but can do so. The employer will need to obtain the worker's agreement to a reduction in pay if it does not intend to top up their pay, unless it has a contractual right to lay them off on reduced pay.

Employers must use an online portal to make a claim.