2021 Budget

This is the seventh in our series of seven blogs regarding the 2021 Budget delivered by the Chancellor, Rishi Sunak on 3 March 2021 and covers the extension of the Coronavirus Job Retention Scheme (CJRS).

The extension of the Coronavirus Job Retention Scheme (CJRS) until September 2021 has been announced.  The Scheme applies to the whole of the UK.

The level of grant available to employers under the scheme will stay the same until 30 June 2021.

https://jsca.co.uk/uk-government-extends-furlough-to-end-of-march/

• From 1 July 2021 the level of grant will be reduced and employers will be asked to contribute towards the cost of their furloughed employees’ wages

• To be eligible for the grant you must continue to pay your furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough

• For periods ending on or before 30 April 2021, you can claim for employees who were employed on 30 October 2020, as long as you have made a PAYE RTI submission to HMRC between the 20 March 2020 and 30 October 2020, notifying a payment of earnings for that employee. This may differ where you have made employees redundant, or they stopped working for you on or after 23 September 2020 and you have subsequently re-employed them. You do not need to have previously claimed for an employee before 30 October 2020 to claim.

• For periods starting on or after 1 May 2021, you can claim for employees who were employed on 2 March 2021, as long as you have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee. Details of how you should calculate your claims for periods starting on or after 1 May 2021 will be provided in updated guidance in due course.

The table below shows the level of UK Government contribution available in the coming months, the required employer contribution and the amount that the employee receives per month where the employee is furloughed 100% of the time.

Wage caps are proportional to the hours not worked.

	Apr	May	Jun	Jul	Aug	Sept
UK Government contribution: wages for hours not worked	80% up to £2,500	80% up to £2,500	80% up to £2,500	70% up to £2,187.50	60% up to £1,875	60% up to £1,875
Employer contribution: employer’s NIC and pension contributions	Yes	Yes	Yes	Yes	Yes	Yes
Employer contribution: wages for hours not worked	No	No	No	10% up to £312.50	20% up to £625	20% up to £625
For hours not worked employee receives	80% up to £2,500 per month	80% up to £2,500 per month	80% up to £2,500 per month	80% up to £2,500 per month	80% up to £2,500 per month	80% up to £2,500 per month

 

Employers can continue to choose to top up their employees’ wages above the 80% total and £2,500 cap for the hours not worked at their own expense.

Links to other 6 Budget Blogs

https://jsca.co.uk/budget-2021/

Income Tax and National Insurance

https://jsca.co.uk/budget-2021-2/

Capital Gains, Inheritance Tax, Pensions, ISAs, 95% Mortgage Guarantee and Wealth Tax

https://jsca.co.uk/budget-2021-3/

Corporation Tax, Super-deduction and Special Rate Allowance, Extended Loss Carry Back for Businesses, New Recovery Loan Scheme, Preventing abuse of Research and Development (R&D) and Reform of Self-Assessment Penalties and Interest

https://jsca.co.uk/budget-2021-4/

VAT and Duties

https://jsca.co.uk/budget-2021-5/

SDLT and LBTT, Licensing in Scotland, Freeports, Levelling Up Fund Prospectus Launch, Green Initiatives, Investment in HMRC and Funding for Scotland

https://jsca.co.uk/budget-2021-6/

Self Employed Income Support Scheme (SEISS)

The information in this blog provides only an overview of HMRC guidance and legislation in force at the date of publication and no action should be taken without consulting the detailed HMRC guidance and legislation or seeking professional advice.  Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this blog can be accepted by the firm.

Photo by Kelly Sikkema on Unsplash