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04 Mar 2021

Chancellor announces extension to the furlough scheme until 30 September 2021

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The Chancellor has announced that the Coronavirus Job Retention Scheme, known as the furlough scheme, will be extended until 30 September 2021. This is a five-month extension to the previously planned end date of 30 April 2021.

The government will continue to pay 80% of the salary of employees for hours not worked until the end of June 2021, with employers required to pay National Insurance Contributions and pensions for hours not worked.  Post June, the scheme will then be tapered with an increasing cost to employers.  Our flowchart below sets out the key information on how this taper will work over the coming months.

BD1150-Furlough-e-elert-01

Employers 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.

At the time of writing, no government guidance or Treasury Direction have been issued and this information is based on the information provided on the government website.

We have a dedicated Covid-19 team of employment lawyers keeping up to date on the latest developments. This news may have an impact on workforce planning, budgets and any proposed redundancies.  If you have any questions please do get in touch with Paul Reeves, Leanne Raven or your usual Stephenson Harwood contact.

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KEY CONTACT

Paul Reeves

Paul Reeves
Head of employment

T:  +44 20 7809 2916 M:  +44 7919 694 135 Email Paul | Vcard Office:  London

Leanne Raven

Leanne Raven
Senior knowledge development lawyer

T:  +44 20 7809 2560 M:  +44 7827 353 108 Email Leanne | Vcard Office:  London