Covid-19 Furlough Scheme Update

The government is making changes to the furlough scheme, also known as the Coronavirus Job Retention Scheme.

Staff will continue to receive 80% of their wages, but employers will pay part of that for the first time.

From 1 July 2021, the level of grant will be reduced and businesses will be asked to contribute towards the cost of furloughed employees’ wages. To be eligible for the grant you must continue to pay your furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough.

From 1 July, employers must pay 10% of their furloughed workers’ usual wage, while the government will continue to pay the other 70%.

From 1 August, the employers’ contribution rises to 20%, with the government’s contribution reducing further.

The holiday for stamp duty will also begin to be tapered, the business rates holiday becomes less generous, and delayed payments for VAT will restart.

The Institute for Fiscal Studies said the bill for employers keeping a member of staff on the scheme would rise from £155 per month currently, which covers costs such as National Insurance, to £322 in July and £489 in August and September. Employers can continue to choose to top up employees’ wages above the 80% total and £2,500 cap for the hours not worked at their own expense.

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