Shorter Reads

Reminder of further changes to the Furlough scheme

From 1 August there will be a further winding down of the Coronavirus Job Retention Scheme.

1 minute read

Published 30 July 2021

Authors

Share

Key information

Further to our update last month on the winding down of the Coronavirus Job Retention Scheme (CJRS) , employers should be aware that from 1 August 2021, they will be required to make an increased contribution towards furlough pay.

In August and September 2021, employers will need to contribute 20% towards furlough pay, with the government contribution reducing to 60% (up to a cap of £1,875 per employee per month). Employers will continue to be responsible for employers’ NICs and pension contributions.

The CJRS has been extended four times since its introduction in March 2020. One of the reasons it was extended to 30 September 2021 was to give businesses some certainty and avoid the need for a further extension. However, we are now in the midst of yet another wave and if this continues or becomes worse in the final quarter this year then the government will come under further pressure to reconsider.

The latest statistics show there were approximately 1.6 million unemployed people in the UK in the three months to May 2021 which represents 4.8%. Obviously, these numbers do not include those on furlough and it will be interesting to see whether the number significantly increases once the scheme comes to an end. Paradoxically, due to Covid and Brexit, we have the worst labour shortage since 1997 following the departure of overseas workers in areas such as transport, hospitality and construction and in higher-paid sectors including finance, IT, accounting and engineering. This has led the CBI to flag the urgent need for businesses and government to reskill furloughed and prospective workers as increasing gaps in the workforce has the potential to slow down the UK’s much needed economic recovery.

Related latest updates
PREV NEXT

Related content

Arrow Back to Insights

Shorter Reads

Reminder of further changes to the Furlough scheme

From 1 August there will be a further winding down of the Coronavirus Job Retention Scheme.

Published 30 July 2021

Associated sectors / services

  • Employment law for employers
  • Employment law for employees

Authors

Further to our update last month on the winding down of the Coronavirus Job Retention Scheme (CJRS) , employers should be aware that from 1 August 2021, they will be required to make an increased contribution towards furlough pay.

In August and September 2021, employers will need to contribute 20% towards furlough pay, with the government contribution reducing to 60% (up to a cap of £1,875 per employee per month). Employers will continue to be responsible for employers’ NICs and pension contributions.

The CJRS has been extended four times since its introduction in March 2020. One of the reasons it was extended to 30 September 2021 was to give businesses some certainty and avoid the need for a further extension. However, we are now in the midst of yet another wave and if this continues or becomes worse in the final quarter this year then the government will come under further pressure to reconsider.

The latest statistics show there were approximately 1.6 million unemployed people in the UK in the three months to May 2021 which represents 4.8%. Obviously, these numbers do not include those on furlough and it will be interesting to see whether the number significantly increases once the scheme comes to an end. Paradoxically, due to Covid and Brexit, we have the worst labour shortage since 1997 following the departure of overseas workers in areas such as transport, hospitality and construction and in higher-paid sectors including finance, IT, accounting and engineering. This has led the CBI to flag the urgent need for businesses and government to reskill furloughed and prospective workers as increasing gaps in the workforce has the potential to slow down the UK’s much needed economic recovery.

Associated sectors / services

  • Employment law for employers
  • Employment law for employees

Authors

Need some more information? Make an enquiry below.

    Subscribe

    Please add your details and your areas of interest below

    Specialist sectors:

    Legal services:

    Other information:

    Jurisdictions of interest to you (other than UK):



    Article contributors

    Enjoy reading our articles? why not subscribe to notifications so you’ll never miss one?

    Subscribe to our articles

    Message us on WhatsApp (calling not available)

    Please note that Collyer Bristow provides this service during office hours for general information and enquiries only and that no legal or other professional advice will be provided over the WhatsApp platform. Please also note that if you choose to use this platform your personal data is likely to be processed outside the UK and EEA, including in the US. Appropriate legal or other professional opinion should be taken before taking or omitting to take any action in respect of any specific problem. Collyer Bristow LLP accepts no liability for any loss or damage which may arise from reliance on information provided. All information will be deleted immediately upon completion of a conversation.

    I accept Close

    Close
    Scroll up

    Find out about Business

    Find out about Dispute Resolution

    Find out about Individuals & Families

    Find out about Real Estate

    We are Collyer Bristow - The law firm for those that
    value individuality, creativity and collaboration.

    Legal & Pricing info Regulatory InformationAccessibilitySitemapPricing and service information

    Listen to our latest podcast: Budget Miniseries: Impacts on Families with US Connections (Part 1)

    Listen to our latest podcast: Cracking the Code on Directors’ Service Agreements

    Read our latest article: Economist, or just economical with the truth? How can employers respond to ‘fake claims’ on a CV?

    Listen to our latest podcast: Autumn Budget 2024 Special (Part 2)

    Read our latest article: ‘Promoting the integrity of the register’: The new Companies House approach to non-compliance

    ExpandNeed some help?Toggle

    < Back to menu

    I have an issue and need your help

    Scroll to see our A-Z list of expertise

    Get in touch

    Get in touch using our form below.



      Business Close
      Private Wealth Close
      Hot Topics Close