Prepare for grant changes from 1 July 2021
As per the budget announcement earlier in March, the Furlough Scheme is extended until September 2021 and the grants available will remain the same until 30 June 2021.
Business owners should prepare now for the changes to the level of grant available which will take affect from 1 July 2021.
From 1 July 2021 employers will have to contribute to the cost of their staff’s wages. Employees will be required to pay furloughed employees 80% of their pay to be eligible for the grant. This will be capped at £2,500 per month for those on furlough.
HMRC has indicated the government contribution from May through to September and the employer contribution for employees that are furloughed for the entire time.
In summary, it means that currently employers do not need to contribute to employees’ wages for the hours not worked. Then from July onwards employers will be required to contribute:
- Employer contribution in July: 10% up to £312.50 for hours not worked
- Employer contribution in August: 20% up to £625 for hours not worked
- Employer contribution in September: 20% up to £625 for hours not worked
The government contribution for the wages for hours not worked will lower from July onwards. Government contribution:
- July: 70% up to £2,187.50
- August: 60% up to £1,875
- September: 60% up to £1,875
This mirrors the changes to the scheme made last year in September 2020 (70%) and October 2020 (60%).
Making a furlough claim
You can check here if you can make a claim for employees’ wages as part of the Coronavirus Job Retention Scheme.
Employers need to note, HMRC advises that claims can be made for periods starting on or after 1 May 2021 for employees that were employed on 2 March 2021 only if PAYE Real Time Information (RTI) has been supplied to HMRC between 20 March 2020 and 2 March 2021, notifying a payment of earnings for that employee. Employers can still make a claim for periods starting on or after 1 May 2021 for an employee even if no previous claim has been implemented before 2 March 2021.
Accounting Oxted
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