The furlough scheme, from now to September

Mar 17, 2021

Ahead of Chancellor Rishi Sunak’s Spring Budget on 3 March 2021, most people were expecting news on the future of the coronavirus job retention scheme, better known as the furlough scheme.

The scheme, which had been claimed by a total of 1.3 million employers as of 25 February and has supported 11.2 million jobs, was originally due to end on 31 March.

But the announcement the day before that the scheme would be extended to the end of September – three months after the Government’s current target for offering the COVID-19 vaccine to all adults in the UK – came as a surprise to some.

Tej Parikh, chief economist at the Institute of Directors, said business leaders would “breathe a sigh of relief” at the news.

“Many firms have tapped into the job retention scheme to support their cashflow while restrictions have eaten into their revenues, and without it jobs losses would be even higher,” he added.

“By extending support until end-September, the Chancellor has also given many businesses an extra cushion as they attempt to rescale and rehire when the economy reopens.”

That extra support is also reflected in revised forecasts provided by the Office for Budget Responsibility, which now suggest the peak in unemployment as a result of the crisis will be 340,000 lower than expected in November.

Furlough from April

The furlough scheme will work in much the same way as it does now for the next few months, offering 80% of eligible employees’ current salary for hours not worked in April, May and June 2021. This is capped at £2,500 a month.

As is currently the case, employers will be required to make employer’s National Insurance contributions and pension contributions for those employees.

From May onwards, eligibility for the scheme will also be amended so it includes newly eligible employees who were employed on 2 March 2021, as long as a payment of earnings was reported on RTI between 20 March 2020 and 2 March 2021.

Furlough from July

As the scheme winds down, employers will need to start making more of a contribution towards staff wages.

From July 2021, a 10% contribution towards the cost of hours not worked will apply up to a cap of £312.50 a month, rising to 20% up to £625 in August and September 2021.

The idea is that employees on furlough will continue to receive the same amount up until the end of September, but business owners will gradually need to pay a greater share over that time.

Deadlines

Claims on the furlough scheme must be submitted by 11.59pm, 14 calendar days after the month you’re claiming for. If that’s a weekend or a bank holiday, the deadline is the next working day.

Claim for furlough days in

Claim must be submitted by

March 2021

14 April 2021

April 2021

14 May 2021

May 2021

14 June 2021

June 2021

14 July 2021

July 2021

16 August 2021

August 2021

14 September 2021

September 2021

14 October 2021

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