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Furlough scheme extended to September 2021

3rd March 2021

The furlough scheme has been extended beyond its current end date of 30 April 2021 to 30 September 2021, with workers continuing to receive 80% of their pay, capped at £2,500 per month.

The extension was announced in the 2021 Budget.

Whilst the key elements of the scheme remain the same for employees, employers will now be asked for a contribution of 10% from July and 20% in August and September towards the hours their staff do not work.

Before July there will be no employer contributions other than the normal National Insurance contributions (NICs) and workplace pensions.

The scheme is being wound down as lockdown restrictions are relaxed.

The extension of the scheme until the end of September will be welcomed by those employers who have been most affected by the lockdown, particularly those in the leisure and tourism industry.

Lockdown restrictions were expected to be lifted by 21 June 2021, but now 19 July 2021.

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.

  May June July August September
Government contribution: wages for hours not worked 80% up to £2,500 80% up to £2,500 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 Yes Yes
Employer contribution wages for hours not worked No No 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 80% up to £2,500 per month 80% up to £2,500 per month

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

For claim periods commencing on or after 1 May 2021, employers will be able to include workers that were not previously eligible. All employees who have had a PAYE RTI submission made for them between 20 March 2020 and 2 March 2021 can now be included in claims relating to periods starting on 1 May 2021, onwards. The eligibility criteria for the periods of March and April 2021 remain unchanged.

More information about the scheme can be found on the .gov website.

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