After 19 months of Government support, the furlough scheme is expected to come to an end in September 2021. There has been no indication of the scheme being extended any further but there are a few changes to be aware of in the coming months, as it begins to wind down.
Government contributions
For June 2021 claims, the Government will continue to fully fund 80% of wages for hours not worked, under the furlough scheme, capped at £2,500 per month.
For claims from 1 July 2021 onwards, the Government contribution for furlough pay is reducing. Employees must continue to receive 80% of their minimum furlough pay, however, it will only be possible to claim the following amounts under the furlough scheme:
- 70% for July 2021; claims capped at £2,187.50; and
- 60% for August and September 2021; claims capped at £1,875 per month.
Employers will be required to pay the 10%/20% of wages in the respective periods to bring employees up to the minimum 80% furlough pay, capped at £2,500. As has been the case since August 2020, employers will also still be required to fund and pay employer’s national insurance and pension contributions.
Eligible employees
Previously it was only possible to claim furlough for employees that had been included on an RTI submission up to 30 October 2020. Since 1 May 2021, it is now also possible to claim for employees who were employed and included on an RTI submission up to 2 March 2021. This has extended the scope for employers as to which employees they may now be able to furlough.
Claims and deadlines
The claim deadlines remain the same as with previous months i.e. within 14 calendar days of the month for which you are claiming. If you miss the claim deadline, HMRC may accept a late claim if you have a reasonable excuse, have taken reasonable care to try and make the claim on time and have claimed as soon as possible after the deadline has passed.
If you have not claimed enough an underclaim needs to be made within 28 calendar days of the month end to which the claim relates to.
If you have claimed too much, HMRC must be notified by the latest of:
- 90 days from receiving the furlough money; and
- 90 days from the point the circumstances changed so that you were no longer entitled to keep the furlough grant.
If you do not inform HMRC of the overclaim within the required deadline, you may be subject to interest and penalties as well as having to repay the excess furlough grant.
Retaining records
The calculations required to make an accurate claim can be complex and HMRC has already opened a large number of enquiries where they suspect that overclaims have been made. Support for any claims made should be retained in case of an enquiry, including written communications with employees who have been furloughed and relevant calculations.
Further, as some normality resumes, the business should also consider whether they are unable to maintain their workforce due to operations continuing to be affected by coronavirus. If coronavirus is no longer impacting the business, then Government support should no longer be claimed under the furlough scheme.
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