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Furlough Scheme Extended Until 30 September 2021

on Friday, 05 March 2021.

This week the Chancellor announced that the furlough scheme will be extended until 30 September 2021. This gives employers the opportunity to utilise the Coronavirus Job Retention Scheme (CJRS) for an additional five months.

Although we are expecting further guidance to be released shortly, there are two notable changes to be aware of. Further information on the CJRS can be found here.

Increased Employer Contributions

The first significant change is that employer contributions are set to increase from 1 July 2021:

  • Until 30 June 2021, employers can claim 80% of an employee's usual salary for hours not worked up to a maximum of £2,500 per month. Employers are still required to cover National Insurance (NI) and employer pension contributions and employers can decide on whether to top up an employee's wage.
  • However, from 1 July 2021, employers will be expected to contribute 10% of an employee's wages which will increase to 20% in August and September before the CJRS is due to end. This is in addition to the NI and pension contributions and the option to top an employee's wages up.

Employees Who Can Be Furloughed

Previously, an employer could only claim for employees for whom they had made a PAYE real time information (RTI) submission to HMRC between 20 March 2020 and 30 October 2020. However, for claims made after 1 May 2021, employees who were added to the payroll on or after 1 November 2020 and who were employed on 2 March 2021, can be furloughed as long as the employer has made a PAYE RTI submission for them between 20 March 2020 and 2 March 2021. Details of how employer's should calculate claims for periods starting on or after 1 May 2021 will be provided in updated guidance in due course.

Coronavirus guidance employers

If you would like specialist legal advice on the Coronavirus Job Retention Scheme, please contact Michael Halsey our Employment Law team on 07554 432829, or complete the form below.

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