1 July 2021

UK's Furlough scheme starts to wind down

From 1 July 2021 employers will have to contribute 10% towards furloughed employees' unworked wages.

The 10% is in addition to the National Insurance payments and pension contributions that employers have already had to cover. The government will continue to pay up to 70% for unworked hours, so furloughed employees should still receive up to 80% of their salary for time they haven't worked worth up to £2,500 a month.

From 1 August 2021, employers will be expected to contribute 20% of workers' salaries for time they haven't worked. This level of contribution will then remain the same until the scheme is due to end on 30 September.

Claims for furlough payments in June must be made by 14 July 2021. You can no longer submit claims for claim periods ending on or before 31 October 2020. Employers can apply online, and will need their Government Gateway user ID and password. The government has provided details online of what you'll need before you start a claim - https://www.gov.uk/guidance/claim-for-wages-through-the-coronavirus-job-retention-scheme#how-to-claim

From 1 July 2021, employers will be expected to contribute 10% of employees' unworked earnings up to £312.50; the government will contribute 70% up to £2,187.50.

From 1 August 2021 until the scheme ends on 30 September, employers will be expected to contribute 20% of employees' unworked earnings up to £625; the government will contribute 60% up to £1,875.

The furlough rules are also slightly different depending on when the claim is for.

Furlough claims on or before 30 April 2021 - to be eligible for a CJRS claim on or before 30 April 2021, employees must have been on your employer's PAYE payroll on 30 October 2020. The employer must also have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020, notifying a payment of earnings. Employees don't need to have been furloughed under the CJRS previously.

Furlough claims from 1 May 2021 onwards - employees must have been on your employer's PAYE payroll on 2 March 2021. The employer must also have made a PAYE Real Time Information (RTI) submission to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings. Employers do not need to have previously claimed for employees before 2 March 2021 to claim for periods on or after 1 May.

Will furlough be extended?

Furlough has been extended four times already, causing much confusion.

One of the reasons it was extended to 30 September - long past the expected end of lockdown - was to give businesses certainty and prevent the need for yet another extension.

Boris Johnson and Chancellor Rishi Sunak both said recently that they do not want to extend furlough again. "On the basis of what we can see now in the data... we don't think we'll need to change," the Prime Minister said on 14 June. If the data changes, and a large new wave of infections leads to another lockdown, the government will come under a lot of pressure to reconsider.

https://www.bbc.co.uk/news/business-57665735

https://www.which.co.uk/news/2021/06/government-reveals-coronavirus-measures-to-protect-wages-self-employed-workers-and-benefit-claimants/