Furlough - What is changing from 1st July 2021?

With Coronavirus dominating 2020 and much of 2021, it is anticipated that most restrictions will end on 19th July 2021. This should mean that many businesses will be able to fully reopen after months of closures and uncertainty.

In turn, as the economy picks up, most furloughed employees should be able to return to work. Up to 30th June 2021, the government paid 80% of the wages of employees on furlough, up to a monthly limit of £2,500.

However, from 1st July 2021, the government will now pay 70% of furloughed workers’ salaries with employers paying 10%.

This will change yet again in August and September when the government’s contribution decreases to 60% and employers will pay 20%.

Workers will still receive the monthly limit of £2,500 (being 80%); therefore the changes will not make any difference to them. However, this does make furlough more expensive to employers as they are already responsible to pay their employees’ pension and National Insurance contributions.

The scheme ceases on 30th September 2021.

For further information the furlough scheme or other personal or employment tax questions please contact us here at Arnold Hill for advice on 0207 306 9100 or email us at info@arnoldhill.co.uk

The information in this article is believed to be factually correct at the time of writing and publication, but is not intended to constitute advice.  No liability is accepted for any loss howsoever arising as a result of the contents of this article. Specific advice should be sought before entering into, or refraining from entering into any transaction.

Written by
Kelly Southby
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