Furlough scheme starts to wind down

The government's Coronavirus Job Retention Scheme (CJRS) begins winding down from 1 July.

The latest data from the Institute for Fiscal Studies (IFS) shows that at the end of April 3.4 million jobs were still on furlough so the change to the furlough scheme will affect thousands of employers across the country.

Since last March, the government has paid 80% of the salaries of employees (up to a maximum government contribution of £2,500 per month) – with the employers only having to pay employer National Insurance and pension contributions.

From 1 July the government will only pay 70% of the furloughed employee's salary, so the employer has to pay 10% of the salary themselves. In August and September, employers will have to pay 20%, with the government picking up 60%. Furloughed employees will continue to receive 80% of their wages including the employer contribution.

However, according to the IFS, the bill for employers keeping a member of staff on the scheme will rise significantly, putting jobs at risk. For a furloughed employee previously earning £20,000 per year, the cost to an employer of keeping them will rise from £155 per month in June to £322 in July, and £489 per month in August and September, after which the scheme is due to end.

Further details of changes to the CJRS can be found at GOV.UK CJRS.

Internet link: IFS publication

Home | Contact us | Site map | Accessibility | Help | Disclaimer |

© 2024 Batchelor Coop Limited. All rights reserved.


Registered to carry out audit work in the UK by the Institute of Chartered Accountants in England and Wales No. C001278265

Registered in England No. 2739117 | Registered Office: Batchelor Coop Limited, The New Barn, Mill Lane, Eastry, Sandwich, Kent CT13 0JW