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Furlough Changes 2021
Furlough Changes 2021


In an attempt to support employers struggling to operate regularly due to the coronavirus pandemic, the furlough scheme was implemented in March 2020.

Currently, the grant is set at 80% of wages, to a maximum of £2,500 per employee per month for their unworked hours. Employers also have the option to top this up to 100% of wages.

Outlined on 3rd March 2021, the Budget confirmed that the scheme will continue until the end of September 2021.

However, it was also clarified that there would be some adjustment to funding levels from July 2021.

This mini blog seeks to outline and clarify these changes for those affected.



How will funding levels change in July?


From the 1st of July, employers will have to pay 10% of staff wages to anyone on furlough.

This change has been made in light of the UK government’s decision to reduce its level of support for the Coronavirus Job Retention Scheme

This shift means that the government’s grant will reduce to cover only 70% of employee wages for unworked hours, at a cap of £2,187.50.

It is also important to note that pay for furloughed employees must remain at a minimum of 80%, at a cap of £2,500, meaning employers must contribute 10% to furloughed staff wages up to £312.50.



Further Changes


A further change has been confirmed: from the 1st of August 2021, until the scheme ends, the government’s grant will reduce a final time to 60% of furloughed employee wages for unworked hours, at a cap of £1,875 per month.

With the 80% rule still in place, employers will need to contribute 20% to staff wages up to £625 per month from August.

Employers will also need to continue making national insurance and pension contributions until the end of the scheme.



Contact Gow & Partners


If you have any queries regarding the changes to furlough, do not hesitate to get I tough with our trusted accountancy team.

Simply call 01254 589799 today! Alternatively, you can fill in a contact form, or send us an email at info@gowandpartners.co.uk.