Furlough scheme changes tomorrow!

As yet another year flies by, it is easy to forget that the government Coronavirus job retention scheme (furlough) changes tomorrow, July 1st 2021. Although access to the scheme has not changed, the liability for employers has.

An employee who is still unable to work and is registered to accept furlough payments must still receive at least 80% of their income up to the value of £2500 per month, the government will now only pay up to 70% of the total up to the value of £2187.50 leaving employers liable for the shortfall.

It is expected that many employers will move their staff onto flexi-furlough and bring them back to work part time to prevent these additional payroll expenses with no hours worked. However the reality of the situation is that this will put financial pressure on already struggling employers which could lead to more redundancies in the coming months as the scheme reduces again in August to the end of September.

Failure to make these changes could lead to legal proceedings with HMRC launching 13,000 investigations into furlough fraud. Please contact Jessica Freeman HR if you need any support in the transitions from the furlough scheme and the issues around return to office work spaces.