The Coronavirus Job Retention Scheme (CJRS) has now been extended until 30 September 2021. Just as many of us never imagined we would see our third national lockdown, most employment lawyers never anticipated we would see a seventh Treasury direction on the CJRS. It was published by HMRC on 15 April 2021 and covers the operation of the CJRS from 1 May 2021 to 30 September 2021. The Treasury direction was preceded by updated guidance on the CJRS, published on 8 April 2021.
Changes coming into effect on 1 May 2021
While many aspects of the CJRS will remain unchanged, there are a number of changes coming into effect on 1 May 2021, including:
- To be eligible to claim for an employee under the CJRS for periods from 1 May 2021, the employer must have registered a PAYE scheme with HMRC on or before 2 March 2021 and have made an RTI submission to HMRC in respect of the employee between 20 March 2020 and 2 March 2021 (inclusive).
- The employer need not previously have submitted a claim in respect of the employee, or indeed any claim under the CJRS.
- An employer may claim for an employee who transfers from another business (where TUPE or PAYE business succession rules apply), provided the employee transferred on or after 1 January 2021, was employed by their former employer on or before 2 March 2021, and either the former or new employer made an RTI submission to HMRC in respect of the employee between 20 March 2020 and 2 March 2021 (inclusive).
Updated guidance on reference days and variable rate employees
The new guidance explains how to identify whether an employee's relevant reference day (for the purposes of calculating their usual wages and hours) is 19 March 2020, 30 October 2020 or 2 March 2021. It also contains worked examples illustrating how to calculate usual working hours and 80% of wages for variable rate employees with a relevant reference day of 2 March 2021.
When calculating average wages for variable rate employees for claim periods from 1 May 2021, days spent on family-related statutory leave, "statutory sick pay leave" or "reduced rate paid leave" following the leave, should not be taken into account (unless the employee was on one of these types of leave throughout the entire calculation period).
Contractors within scope of off-payroll working (IR35) rules
Government guidance has recently been updated in respect of contractors engaged by a medium or large-sized organisation who are deemed employees according to the off-payroll working rules: such individuals may be eligible under the CJRS, subject to meeting other eligibility requirements.
Tapering of government contribution
The level of grant available to employers under the CJRS will stay the same for claim periods up to 30 June 2021. For claim periods from 1 July 2021, grants under the CJRS will reduce from 80% of salary (capped at £2,500 a month) to 70% (capped at £2,187.50). For claim periods from 1 August 2021 until 30 September 2021, grants will reduce to 60% of salary (capped at £1,875). Employers will be required to make up the difference to 80%.
What the future may hold after 30 September 2021
There is no indication that the CJRS will be extended beyond 30 September 2021; however, following several extensions, a further extension (and an eighth Treasury Direction) remains a possibility. The Job Support Scheme appears to have been postponed indefinitely, although we may see this revived in some form following the eventual end of the CJRS.