Extension to the furlough scheme

Extension to the furlough scheme

Thursday, 04 March 2021

In his Budget statement on 3 March 2021, Rishi Sunak confirmed the Coronavirus Job Retention Scheme (furlough) is to be extended until 30 September 2021.

The Job Retention Scheme has been a lifeline to employers over the past 12 months, ensuring employers can continue to pay their employees during periods of imposed closure and slower trading conditions.

The furlough scheme provides support covering 80% of an employee’s usual wages for hours not worked, up to a maximum cap of £2,500. Employers are only required to cover the cost of wages for hours worked (for those on flexible furlough), alongside the cost of the Employers’ National Insurance and pension contributions.

This level of support will continue in its current format until 30 June 2021. From 1 July 2021, employers will be asked to contribute 10% towards the cost of the usual wages for hours not worked, increasing to 20% for August and September 2021.

In light of the total value of the Job Retention Scheme, which thus far has cost the Government £53.8 billion, the Chancellor also announced an investment of over £100 million for a new Taxpayer Protection Taskforce. This Taskforce will consist of over 1,200 HMRC staff who will be tasked with combating fraud within COVID-19 support packages, including the furlough scheme and the Self-Employment Income Support Scheme. This will be one of the largest responses to tackling fraud by HMRC.

Alongside this announcement, the Chancellor also confirmed:

There would be no increase to income tax or National Insurance rates.
That personal allowances would increase to £12,570 with effect from 5 April 2021, and then would remain frozen at this rate until April 2026.
The higher rate band will increase to £50,270 with effect from 5 April 2021, and then will also remain frozen until April 2026.

If you have any questions about the furlough scheme, please get in touch with your usual contact. You can find contact details on the Our People section of the website. Alternatively, call 0330 024 0888 or email

Emma Arthurton


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