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This initially covered staff retained on the payroll but undertaking no work for the employer (known as ‘furloughed’ employees). The scheme was later expanded to include staff who only work a proportion of their normal hours. The scheme was due to end on 31st March 2021, but has been further extended until 30th September 2021

Under the extended scheme, the Government paid 80% of the wages of employees for hours not worked until 30th June 2021, subject to a cap of £2,500 per employee.  Employers must pay all related employer National Insurance Contributions (NICs) and pension contributions.

In July, the Government contribution reduced to 70% of wages for hours not worked, up to a cap of £2,187.50. The employer must pay the employee 10%, up to a cap of £312.50.

For August and September, the Government contribution will fall to 60% of wages for hours not worked, subject to a cap of £1,875. The employer contribution will increase to 20%, capped at £625. As under the current scheme, flexible furloughing will be allowed in addition to full-time furloughing. 

The scheme will be available to all employers with a UK bank account and UK PAYE schemes. Neither the employer nor the employee needs to have previously used the CJRS. 

Key points about the extended Furlough Scheme

  • To be eligible for claims from 1st May 2021, employees must have been employed on 2nd March 2021 and reported on an employer’s PAYE payroll between 20th March 2020 and 2nd March 2021.
  • Employers do not need to have previously claimed for an employee before 2nd March 2021 to claim for periods from starting on or after 1st May 2021.
  • Employees can be on any type of contract. Employers will be able to agree any working arrangements with employees. 
  • Employers can claim the grant for the hours their employees are not working, calculated by reference to their usual hours worked in a claim period. Such calculations will broadly follow the same methodology as currently under the CJRS. 
  • When claiming the CJRS grant for furloughed hours, employers will need to report and claim for a minimum period of seven consecutive calendar days. 
  • Employers will need to report hours worked and the usual hours an employee would be expected to work in a claim period. 
  • For worked hours, employees will be paid by their employer subject to their employment contract and employers will be responsible for paying the tax and NICs due on those amounts. 

The Government expects that publicly funded organisations will not use the scheme, as has already been the case for CJRS, but partially publicly funded organisations may be eligible where their private revenues have been disrupted. All other eligibility requirements apply to these employers.

How we can help

There are several ways in which we may be able to help. It is always important to get good advice and particularly true in turbulent times like now. If you need help please talk to us on 0800 0523 555 or use our online enquiry form

For our latest COVID-19 news and guidance for your business, visit our dedicated Coronavirus Hub.
We will be updating it regularly as we continue to monitor and digest all the latest information


Date published 22 Apr 2020 | Last updated 29 Jul 2021

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.


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