Tue 2nd Mar 2021 - Furlough extended until September, businesses to contribute to unworked hours from July Furlough extended until September, businesses to contribute to unworked hours from July: The government is to extend the Coronavirus Job Retention Scheme (CJRS) – known as furlough – until the end of September, but business will be asked to contribute 10% in July and 20% in the following two months towards the hours their staff do not work. As part of the extension, there will be no change to the terms for employees and they will continue to receive 80% of their salary for hours not worked until the scheme ends. However, as restrictions are eased and the economy begins to reopen, businesses will be asked to contribute alongside the taxpayer to the cost of paying their employees for hours not worked. The government said it will ask for a “small contribution of just 10% in July and 20% in August and September” towards the hours their staff do not work. Between now and the 30 June, the government will continue to pay 80% of wages up to a cap of £2,500 monthly for hours the employee does not work, employers will continue to pay employer national insurance contributions (NICs) and pension contributions. From 1 July, the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee is on furlough. Employers will need to make an additional contribution of 10% towards the cost of paying for unworked hours and continue to pay employer NICs and pension contributions. From 1 August, the government will pay 60% of wages up to a cap of £1,875 monthly for the hours the employee is on furlough. Employers will need to contribute 20% towards the cost of paying for unworked hours and continue to pay employer NICs and pension contributions. As under the current CJRS, flexible furloughing will be allowed in addition to full-time furloughing, so employers can bring employees back to work for any amount of time and any shift pattern, while still being able to claim CJRS for hours not worked. Chancellor Rishi Sunak said: “Our covid support schemes have been a lifeline to millions, protecting jobs and incomes across the UK. There’s now light at the end of the tunnel with a roadmap for reopening, so it’s only right that we continue to help business and individuals through the challenging months ahead – and beyond.” UKHospitality chief executive Kate Nicholls said: “Extending the full scheme up to and beyond the point of full reopening of the sector is a welcome move. It will help keep businesses afloat and more jobs secure as they trade their way back to prosperity in the years to come. This means it is more important than ever the government sticks to its plan to allow full reopening of venues on 21 June. Expecting businesses to contribute to the scheme from the end of July is a worry, though. It will place unnecessary pressure on fragile businesses just as they are beginning to get back to their feet. It is also very disappointing not to have employer national insurance contributions removed from the scheme. Businesses are burning through their cash reserves and many will have exhausted them before they have a chance to reopen. Not all businesses are going to be out of the traps instantly. It will take time for them to reopen and they will be racking up costs in the meantime. It is now more important than ever the chancellor delivers a wider package of support in his Budget statement. Extended furlough alone will not be enough to give businesses the support they need to survive the spring and summer, particularly if businesses are now incurring additional costs. We must have an extension of the VAT cut and business rates holiday if we expect to see businesses survive and thrive after the crisis has passed.”