It has been difficult staying up to date with the latest affairs in relation to furlough, as it seems as though the goalposts are changing on a regular basis. However, the latest business news relating to the Coronavirus Job Retention Scheme is that it’s to end in September 2021. Before this happens, a raft of changes is expected. Let’s take a closer look at these below.
At the moment, the UK Government pays 80% of a furloughed employee’s wages up to a maximum of £2,500 per month, with employers paying pension and National Insurance contributions.
From the 1st of July
However, the UK Government has stated that the amount of financial help that can be claimed will drop from 1 July. Although this should not affect employees, employers will only be able to claim 70% of employee wages up to £2,187.50. This means employers will have to pay 10% of the salary for any hours not worked (up to £312.50) while continuing to pay National Insurance and pension contributions.
From the 1st of August
From August, the level of government support will drop even more to 60%, or £1,875 per month per employee, with firms asked to contribute 20% of the 80% monthly pay, plus pension and National Insurance contributions.
Note: Employers can still continue to top up employees’ wages above the 80% total and £2,500 cap for the hours not worked at their own expense.
Although there is still hope the scheme will be extended, a spokesperson for the government said: “The furlough scheme is in place until September – we deliberately went long with our support to provide certainty to people and businesses over the summer.
“The number of people on the furlough scheme has already fallen to the lowest level this year, with more than one million coming off the scheme in March and April – showing our plan for jobs is working.
“Businesses can also continue to access other support including business rates cuts, VAT cuts and our recovery loan scheme.”
If you’re still unsure about the upcoming changes to furlough and need more guidance, contact our team of experts at CWR Accountants who will be more than happy to advise you.