Furlough has been extended until 30 September 2021, however, the level of grant available to employers under The Coronavirus Job Retention Scheme is set to reduce from 1st July, 2021. This means that employers will need to ‘top up’ wages to ensure that their employees continue to receive 80% of their salary, capped at £2,500 per month.
Changes to the level of grant from 1 July 2021
From 1 July 2021, the level of grant given to businesses will be reduced on a sliding scale over three months until furlough ends on 30th September. This is a big change for many businesses who will now be paying a share of any furloughed staff wages.
To be eligible for the grant, employees must receive 80% of their wages per month, up to £2,500, although employers can top up employees’ wages above the 80% at their own expense.
The table below shows the level of government contribution available in the coming months, the required employer contribution assuming that employees are furloughed for 100% of their contracted time. Wage caps are proportional to the hours not worked, therefore for those on flexi-furlough these figures will need to be adjusted accordingly.
|Government contribution: wages for hours not worked||80% up to £2,500||70% up to £2,187.50||60% up to £1,875||60% up to £1,875|
|Employer contribution wages for hours not worked||No||10% up to £312.50||20% up to £625||20% up to £625|
|For hours not worked employee receives||80% up to £2,500 per month||80% up to £2,500 per month||80% up to £2,500 per month||80% up to £2,500 per month|
If you want to discuss furlough or any aspect of your business finances, call us on 01992 444466. We’re experts ready to support you and your business, no matter your company size or sector.
View our latest blogs below
- How Carbon Offsetting helps business and the planet
- Employing your teenager to work for you
- How to start and run a limited company – free Companies House webinar
- Are you using all your Tax Allowances? Use Them or Lose Them – learn more here
- SEISS 5 grant applications to open in late July (Self-Employment Income Support Scheme)
The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors or omission or for any person acting on or refraining from acting on the information provided in the above