What Do You Need to Know About the Extended Furlough Scheme? – July 2021

In case you have missed out on the updates on the furlough scheme extended in the UK. Here is an article from Pearson McKinsey, inclusive of  What do You need to Know About the Extended Furlough Scheme? – July 2021

What is the furlough scheme?

It was brought in during the spring of 2020 by the UK government. The pandemic called for the introduction of this scheme.

Furlough scheme was put forward to bring a stop to employees from getting laid off by their employers during the lockdown. It also helped preserve jobs during hard times.  

Is the furlough scheme being extended?  

Yes! The furlough scheme has been extended by the UK government. However, it has been prolonged four times now. One of the primary reasons was the chances of lockdown extension by September.

As per the rules set by the government during the announcement of the budget, the Coronavirus Job Retention Scheme (CJRS) or the furlough scheme has been extended until the end of September 2021.

It was solely introduced to help employers facing trouble in retaining their employees under the pressure of lockdown and the pandemic.  

What was the furlough scheme before like?  

Previously the government was paying 80% of employees’ wages to the employers so they can afford to pay their wages. The limit was up to £2,500 for a month. However, the government has changed their rules. All the details about the changes are given below.  

What is the extended furlough scheme – 2021?

• As per the changes, from the 1st of July, the government will pay 70% of wages to the employers to pay their employees, and it’s the responsibility of the employer to make up the remaining 10%.  
• Furthermore, in August, the government will pay 60% of salaries to the employers, and the employer takes the responsibility to make up the remaining 20%.  
• And moving forward to September, the government will pay the employers a part of 50% of wages to the employees, and the employers will have to make the rest 30% on their own.  
• The limit of £2,500 will remain as it was before. This way, the workers will also not notice the difference. 

This article is published in the latest following all the relevant news as passed by the UK government in accordance with the furlough scheme. 

If you are looking for services related to taxation, finance, wills, and probates, then feel free to contact Pearson McKinsey.

We provide our clients with the best tax advisory and services accountancy in London.

Our services include accounting, taxation and financial planning for businesses and individuals in the UK.