Angus Brewer Business & Tax Consultant

Important changes to Coronavirus Job Retention Scheme (CJRS or furlough) came into force on 1 July 2021, with employers being required to contribute a percentage towards their employees’ wages for hours not worked.

From 1 July 2021, the level of Coronavirus Job Retention grant has been reduced and you will need to contribute towards the cost of your furloughed employees’ wages. To be eligible for the grant you must continue to pay your furloughed employees 80% of their wages, up to a cap of £2,500 per month for the time they spend on furlough.

The table below shows the level of government contribution available in the coming months, the required employer contribution and the amount that the employee receives per month where the employee is furloughed 100% of the time.

Wage caps are proportional to the hours not worked.

  July August September
Government contribution: wages for hours not worked 70% up to £2,187.50 60% up to £1,875 60% up to £1,875
Employer contribution: employer National Insurance contributions and pension contributions Yes Yes Yes
Employer contribution wages for hours not worked 10% up to £312.50 20% up to £625 20% up to £625
For hours not worked employee receives 80% up to £2,500 per month 80% up to £2,500 per month 80% up to £2,500 per month

You can continue to choose to top up your employees’ wages above the 80% total and £2,500 cap for the hours not worked at your own expense.

Employers with employees still on furlough?

With the imminence of these changes and the ultimate (expected) end of the CJRS on 30 September 2021, employers with employees still on furlough should, if they have not already, ensure there are sufficient funds to meet the required employer contributions and plan for the return of staff.  

You might want to consider, for example, managing holiday and requiring employees to take holiday before they return.

As always, you should check the latest government guidance on the changes here
(https://www.gov.uk/government/publications/changes-to-the-coronavirus-job-retention-scheme/changes-to-the-coronavirus-job-retention-scheme

The full guidance and details of the Coronavirus Job Retention Scheme can be found here
(https://www.gov.uk/government/collections/coronavirus-job-retention-scheme)