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Furlough scheme changes from 1 July 2021


The furlough scheme has been a vital lifeline for many businesses who have struggled during the COVID-19 pandemic, allowing their staff to keep their employment while also helping the business if they have had to close or temporarily reduce staff.

As we hopefully move closer to the end of the pandemic the government are changing the way in which the furlough scheme operates.

Changes to the furlough scheme

The government has confirmed its intention that furloughed employees will be paid 80% of their wages for hours not worked under the furlough scheme.

Up to 30 June 2021, this payment will be fully-funded by government and capped at £2,500 per month.

From 1 July 2021, employers are required to contribute 10% of the 80% (capped at £312.50 per month) government contributing 70% of the 80% (capped at £2,187.50 per month).

From 1 August 2021, until the scheme is due to end 30 September 2021, employer contributions rise to 20% of the 80% (capped at £625 per month) government contributing 60% of the 80% (capped at £1,875 per month).

Readers are reminded that one of the conditions to apply for this support is that you can demonstrate that your business continues to be adversely affected by COVID disruption.

Throughout this period, employers are fully responsible for payment of any hours worked.

If you would like advice or support in arranging furlough for staff members please contact us and our payroll team and help you through the process.

Smita Patel



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