The furlough scheme, also known as the Coronavirus Job Retention Scheme (CJRS), has been a lifeline for many businesses as we have pushed through the pandemic over the past 15 months, and whilst many businesses have reopened, there are still some that are having to wait until the 21st June to open their doors to the public once again, and therefore still need Government support.
HMRC has recently published guidance on updates to the furlough scheme (which has been extended from the 1st May 2021 to 30th September 2021) and due to the fact that many sectors in the UK economy have reopened and recovery has begun, the financial support available to employers will be drastically reduced. With necessary financial support being withdrawn, some businesses are at serious risk if they do not take preventative action now.
Throughout May and June, employers must pay the costs of associated Employer National Insurance as well as contributions to workplace pensions. However the furlough scheme will continue to cover 80% of the wages paid to employees.
Claims for days furloughed in May 2021 must be made by 14th June 2021.
When we reach July, the Government will begin to reduce the financial support on offer, and employers will be required to make a 10% contribution, and then in August and September they must increase their contribution to 20%.
Employers are encouraged to seek advice on the calculation of employee’s furlough payments as this remains complex and can lead to confusion, therefore making it difficult to remain compliant.
For further information please visit the GOV website.
If you need advice on furlough, get in touch with us.