Changes to the furlough scheme from 1 July 2021

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Computer key with Furlough Scheme written on it

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Paul Wood

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The Coronavirus Job Retention Scheme (CJRS) commonly known as the furlough scheme is open to all UK employers to access support to continue paying part of their employees’ salary for employees that

Changes to the furlough scheme from 1 July 2021

The Coronavirus Job Retention Scheme (CJRS) commonly known as the furlough scheme is open to all UK employers to access support to continue paying part of their employees’ salary for employees that would otherwise have been laid off during this crisis.

The end date for CJRS has been extended multiple times since the scheme was launched and in the Spring Budget 2021, the Chancellor announced a final extension until 30 September 2021. Employees can receive up to 80% of their salary for hours not worked subject to a monthly maximum of £2,500 until the scheme ends.

Since 1 July 2021, employer contributions towards the cost of unworked hours have been put in place. Employers are required to contribute 10% towards wages for hours not worked during July rising to 20% in August and September 2021.

This means that since 1 July 2021, government support has been lowered to 70% of wages up to a reduced £2,187.50 cap. Employers will pay employers’ NIC, pension costs plus 10% of wages for hours not worked (up to £312.50) to a total cap of £2,500 for hours not worked.

You can continue to choose to top up your employees’ wages above the 70% total and £2,500 cap for the hours not worked at your own expense.

From 1 August until 30 September 2021, government support  for the Coronavirus Job Retention Scheme will be lowered further to 60% of wages up to a reduced £1,875 cap and employers paying 20% of wages for hours not worked up to £625.

Unsure on how this could affect your business or want to discuss the best approach to furlough costs and your staff? Get in touch with us today.

Source: HM Revenue & Customs Tue, 06 Jul 2021 00:00:00 +0100

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