Payroll | CIS | Auto Enrolment

Furlough Extension: Changes from July 2021

June 14, 2021

The furlough scheme, which was previously due to end at the end of April 2021, was recently extended up until the end of September 2021. However, there are some changes taking place from July 2021 which you should be aware of. 

Up until the end of June, the government will continue to pay 80% of the employees’ usual wages for the hours not worked. 
For periods in July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875. Employers will need to still top up to 80% of employees’ usual wages or up to the cap of £2500 until the furlough scheme ends.

The below table outlines the monthly changes up to the end of September 2021: –
Period Furlough Claim Furlough Cap Employer Top Up
Up to end of June 21 80% usual wages £2500 0%
July 2021 70% usual wages £2187.50 10% OR up to £2500
August 2021 60% usual wages £1875 20% OR up to £2500
September 2021 60% usual wages £1875 20% OR up to £2500

Eligibility
For periods from 1 May 2021 onwards, employers will be able to claim for eligible employees who were on employers’ PAYE payrolls and submitted to HMRC between 20th March 2020 and 2 March 2021.

Up until the end of June, the government will continue to pay 80% of the employees’ usual wages for the hours not worked. 

For periods in July, CJRS grants will cover 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50. In August and September, this will then reduce to 60% of employees’ usual wages up to a cap of £1,875. Employers will need to still top up to 80% of employees’ usual wages or up to the cap of £2500 until the furlough scheme ends. 

The below table outlines the monthly changes up to the end of September 2021: –

Period   Furlough Claim   Furough Cap   Employer Top Up  
Up to end of June 21   80% usual wages   £2,500 0%
July 2021 70% usual wages £2,187.50 10% OR up to £2500  
August 2021 60% usual wages £1,875 20% OR up to £2500
September 2021 60% usual wages £1,875 20% OR up to £2500

Eligibility: for periods from 1 May 2021 onwards, employers will be able to claim for eligible employees who were on employers’ PAYE payrolls and submitted to HMRC between 20th March 2020 and 2 March 2021.

National Minimum Wage

Changes from April 2023 are as follows: –

Current Year

23 & over

21 to 22

18 to 20

Under 18

Apprentice

April 2023

£10.42

£10.18

£7.49

£5.28

£5.28

Previous Year

23 & Over

21 to 22

18 to 20

Under 18

Apprentice

April 2022

£9.50

£9.18

£6.83

£4.81

£4.81

Income Tax and National Insurance

Income Tax thresholds as indicated below:

Personal allowance: £12,570

Standard Tax code: 1257L

Income tax: £12,571 – £50,270 @ basic rate 20%

                  £50,271 – £125,140 @ higher rate 40%

                      Over £125,140 @ additional rate 45%

Student Loan thresholds: Plan Type 1 £1834 per month

                                       Plan Type 2 £2,274 per month

                                       Plan Type 4 £2,305 per month

                                       Postgraduate Loan £1,750 per month

National insurance primary threshold: increase from £823 to £1048 per month or £190 to £242 per week.

National insurance secondary threshold: Is £758 per month or £175 per week.

Statutory Payments

The earnings threshold for statutory payments increases from £120 per week to £123 per week

Statutory maternity pay/statutory adoption pay: weekly rate increase from £156.66 to £172.48; the first 6 weeks will remain at 90% of the employee’s average weekly earnings

Statutory paternity pay/shared parental pay: weekly rate increases to £172.48

SSP: weekly rate increases from £99.35 to £109.40

Auto Enrolment

The Automatic Enrolment earnings threshold will remain at £10,000. The lower earnings limit of the qualifying earnings band will remain at £6,240 and the upper earnings limit of the qualifying earnings band will remain at £50,270.

Minimum pension contributions remain at 3% employer and 5% employee

Employment Allowance

Only businesses with an employer national insurance bill of £100,000 or less in the previous tax year will be eligible to claim Employment Allowance.

For businesses who are eligible to claim it, the Employment Allowance is £5000 for the year.

Furlough Extension: Changes from July 2021