The Furlough scheme has acted as a saving grace for many UK businesses during the pandemic, offering companies much-needed funds to pay staff wages and retain workforces while unable to operate.
By putting staff members on “furlough”, employers have been able to recover a portion of employee wages up to £2,500 per employee, per month.
However, as the end of the pandemic encroaches and the country looks to recover the economy, changes to the Furlough scheme are inevitable.
Just this week, it was announced that alterations to the support offered via the Furlough scheme are to be rolled out in July. The scheme will run as normal until the end of June, with businesses still able to claim for 80% of wages for hours unworked.
Furlough changes from July
As of July 1st, employers can claim 70% of staff wages up to £2,187.50. Employers will still have to make National Insurance contributions and pension contributions for each staff member. Another notable change that businesses need to be aware of is the fact that employers will be liable to contribute to wages for hours not worked; 10% up to £312.50. This means that the employee will still receive 80% up to £2,500 per month. This has been designed to slowly reduce the money being spent by the Government on Furlough payments while easing employers back into supporting wage bills.
Furlough Changes from August
As of August, the Furlough scheme will cover 60% of staff wages up to £1,875. Employers will then need to contribute 20% of wages for unworked hours, giving employers 80% of their normal wage. The same support will be offered in September 2021.
Jamie Williams, Director of Lime Advisory, believes the Furlough scheme has been instrumental in navigating businesses through an incredibly tough year of lockdown restrictions and unpredictabilities.
“While the Furlough scheme is still supporting UK businesses until the end of September 2021, there are many changes and tweaks to the scheme with each month that passes. Here at Lime Advisory, we are ensuring our clients understand the support that they are in reach of and are planning company finances in accordance”.
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