September 10, 2021

Furlough is ending: what do payroll professionals need to do?

After supporting businesses for 19 months, the Coronavirus Job Retention or Furlough Scheme finally ends on September 30th 2021. What do employers and payroll professionals need to do as the scheme comes to a close?

Many payroll professionals have had to adapt to furlough calculations and processing since March 2020. Whether going back to normality is a relief for your payroll team, or a worry, we hope this article helps it go as smoothly as possible for you.

How much you can claim in September

As the UK government prepares to bring the Coronavirus Job Retention Scheme to a close, their government funded contributions have been reduced in a phased manner.

  • The UK government paying the original 80% of employees’ usual wages for the hours not worked, up to a cap of £2,500 per month, ended at the end of June 2021.
  • For periods in July 2021, Coronavirus Job Retention Scheme grant covered 70% of employees’ usual wages for the hours not worked, up to a cap of £2,187.50.
  • In August and September 2021, this was reduced to 60% of employees’ usual wages up to a cap of £1,875.

Employers have needed to continue to pay furloughed employees at least 80% of their usual wages for the hours they do not work during this time, up to a cap of £2,500 per month. This means, for periods between July and September 2021, employers have needed to fund the difference between this and what the Coronavirus Job Retention Scheme has granted.

You can also top up wages above the 80% if you wish, but you are not required to do so.

Contributions to pay

You must continue to pay the associated Employer National Insurance contributions and pension contributions on subsidised furlough pay from your own funds. If you don’t do that, you’ll need to repay the whole of the Coronavirus Job Retention Scheme grant, as this is a condition of applying for the grant.

There is detailed guidance to help you claim through the CJRS and key deadlines you need to be aware of.

Claim dates

Claim for furlough days inClaim must be submitted by
August 202114 September 2021
September 202114 October 2021

If you have not claimed enough

To amend a claim for:You must amend the claim by 11:59pm on:
July 202131 August 2021
August 202128 September 2021
September 202128 October 2021

After September

Happily, after furlough finishes and you’ve submitted your final claim and paid your contributions, there are no more actions for you to take on the payroll side of things. You can go back to regular payroll processing for October’s pay period.

Any furloughed employees must return work on 1st October, and partially furloughed employees must return to their full time role from this date as well.

We’d recommend taking some time to support them with their transition as this might be a bit of a shock to the system, especially if some employees have been furloughed for the majority of the time the scheme was open. For example, you could arrange one-to-ones with key team members they collaborate with, give them some refresher training, or assign back-to-work buddies.

What to do if your business is facing issues now that furlough is over

Without the cushion of CJRS payments that have supported employers throughout the pandemic, some businesses may may need to adjust to “business as usual” after this period.

It might be that you need to rearrange your workers contracts to suit new business needs. Alternatively, with the rise of more flexible working arrangements, your employees might go to you asking for certain changes to their contract, for example, requesting to work at home. If that’s the case, read our ultimate guide on flexible working here, and check the eight reasons for refusing a flexible working request before you make any decisions.

We hope it won’t come to this, but if you’re considering making any redundancies in the business, make sure you’ve explored all of the law and etiquette surrounding this topic first. You can read our guide on redundancy or watch our webinar recording that goes into detail on the topic.

Further support

To get further advice on the CJRS and more, you can sign up to receive regular email updates from HMRC, (and refer to our own website content here) to keep up-to-date with the latest information.

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About the author

Karis Lambert

About the author

Karis Lambert

Karis Lambert is Moorepay's Digital Marketing Executive, having joined the team in 2020. Karis keeps our customers up-to-date with Moorepay's market-leading knowledge and advice by keeping our digital channels up to date, including the website and social media. Karis has a strong background across multiple aspects of digital marketing, including qualifications with the Chartered Institute of Marketing, which she brings to Moorepay to help communicate effectively with our valued clients.

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