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Furlough scheme extended to end of September 2021

Posted on 3 March 2021

The Chancellor announced in today's Budget that the Coronavirus Job Retention Scheme (the furlough scheme) is being extended to 30 September 2021.

The furlough scheme was due to end on 30 April 2021 but is now extended by a further five months. During the remaining lifetime of the scheme, furloughed employees will continue to receive 80% salary (capped at £2,500 per month) for hours not worked, but from 1 July 2021 employers will progressively bear more of the cost of the scheme.

The timeline is as follows:

  • Until 30 June 2021 – the furlough scheme continues in its current form. The Government continues to pay a grant of 80% of furloughed employees' salary costs for hours not worked. Employers remain responsible for employer NICs and employer pension contributions.
  • July 2021 - the Government grant reduces to 70%. Employers pay the other 10%, in addition to employer NICs and employer pension contributions.
  • August and September 2021 - the Government grant reduces to 60%. Employers pay the other 20%, in addition to employer NICs and employer pension contributions.

As part of their ongoing business planning, employers will need to factor in the increasing costs from July 2021 of keeping staff on furlough.

If you have any queries or would like assistance with employment-related coronavirus issues, please get in touch with your usual Mishcon contact or with a member of the Employment team.

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