Further Extension of the Furlough Scheme as the UK Emerges from Lockdown

Caroline Cobain
Caroline Cobain
Legal Director
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As widely reported in the news this week, in yesterday’s Spring Budget, the Chancellor, Rishi Sunak, announced that the Coronavirus Job Retention Scheme (the furlough scheme) is being extended by a further period until 30 September 2021. It is hoped that this further extension of the scheme will provide much-needed support to businesses and employers as the UK begins to emerge from lockdown in the coming months.

The Chancellor had previously confirmed that the government would continue to make the 80% contribution under the furlough scheme until the end of April, with employers continuing to be required to pay wages and employer’s National Insurance and pension contributions only, for both hours worked and furloughed hours, for that period. This has now been promised until the end of June 2021.

For the months that the scheme is available thereafter, though, the government has now announced that, in addition to employer National Insurance and pension contributions for both hours worked and furloughed hours for the remaining months of the scheme, employers are also going to be required to make a 10% contribution in respect of hours not worked in July, going up to 20% during the months of August and September.

Neither the Chancellor, nor the written budget itself, has indicated whether there will be any further changes to the terms of the furlough scheme but we will update clients should any further changes be announced.

Also of interest to employers will be the Chancellor’s confirmation that, from April 2021, the National Living Wage (which will now be the required minimum wage for workers over the age of 23) will be increased to £8.91.

You can read the Chancellor’s speech, here and the full written budget, here.

If you have any questions on the extension of the furlough scheme in the meantime, or if you require support or advice on any other employment law matters, please do not hesitate to contact our team on 0141 331 5150.

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