Furlough scheme extended until the end of September

The furlough scheme, which sees the state cover 80% of employees’ wages (subject to a monthly cap of £2,500) for the hours unable to be worked during the COVID-19 pandemic, will continue to support millions of small businesses and staff through the “challenging months ahead”. 

Over 11 million jobs have been safeguarded due to the furlough scheme, which was due to cease at the end of April. 

Employers must continue to pay employer National Insurance Contributions (NICs) and pension contributions for any hours an employee cannot work. 

Under the terms of the furlough scheme’s extension into autumn 2021, employers will be required to pay 10% towards the hours their employees cannot work in July, which increases to 20% in August and September. Mr Sunak believes this phased approach will work alongside the Government’s ‘roadmap’ unveiled last month. 

“Our Covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK,” said Mr Sunak. 

“There’s now light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help business and individuals through the challenging months ahead – and beyond.” 

Another key announcement was that eligibility for claiming under the furlough scheme will change from 1st May 2021.  From that date an employer can claim for those who were employed on 2nd March 2021, as long as an PAYE RTI submission was made between 20th March 2020 and 2nd March 2021, notifying a payment of earnings for that employee. 

Crackdown on fraudulent furlough claims

In a sign the Government intends to crack down on fraudulent claims, it also announced a £100 million investment to create a Taxpayer Protection Taskforce of 1,265 HMRC staff. This new team will focus on combating fraud within coronavirus support packages, such as the furlough scheme and Self-Employment Income Support Scheme. The Government also plan to will raise awareness of enforcement action in order to deter fraud and plan to significantly strengthen law enforcement for Bounce Back Loans. 

For more about what The Chancellor announced in his Budget and how these changes may affect you and your business, please visit our dedicated Budget Hub.

Date published 3 Mar 2021 | Last updated 9 Apr 2024