Furlough Scheme Update

Here’s a summary of the Chancellors recent notification (29th May) highlighting revisions to the Coronavirus Job Retention Scheme (CJRS) aka “Furlough”.


From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back part time. Individual organisations will need to decide the hours and shift patterns their employees will work. The employers will be responsible for paying their wages while in work.


From August 2020, the level of government grant provided through the job retention scheme will be slowly tapered to reflect an expectation of a steady return to work.


During June and July, the government will continue to pay 80% of the furloughed employees salaries but after this period businesses will be expected to make contributions.

The following will apply for the period people are furloughed:

 

  • June and July: The government will pay 80% of wages up to a cap of £2,500 as well as employer National Insurance (ER NICS) and pension contributions. Employers are not required to pay anything.
  • August: The government will pay 80% of wages up to a cap of £2,500. Employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs the employer would have incurred had the employee not been furloughed.
  • September: The government will pay 70% of wages up to a cap of £2,187.50. Employers will pay ER NICs and pension contributions and 10% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 14% of the gross employment costs the employer would have incurred had the employee not been furloughed.
    October: The government will pay 60% of wages up to a cap of £1,875. Employers will pay ER NICs and pension contributions and 20% of wages to make up 80% total up to a cap of £2,500. For the average claim, this represents 23% of the gross employment costs the employer would have incurred had the employee not been furloughed.

 

In addition to the CJRS announcement Chancellor Rishi Sunak, confirmed that those eligible under the Self-Employment Income Support Scheme (SEISS), which has so far seen 2.3 million claims worth £6.8 billion will be able to claim a second and final grant in August.


The grant will be worth 70% of their average monthly trading profits, paid out in a single instalment covering three months’ worth of profits, and capped at £6,570 in total

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