At his latest announcement on Friday, the Chancellor informed us that the government’s Coronavirus Job Retention Scheme (or furlough scheme) is to come to an end on 31st October 2020.
He also provided specific details of the financial contributions which will be required by employers as the scheme winds down, as well as confirmation that the Self-Employed Income Support Scheme will be extended as many had hoped.
With so many dates and figures to get to grips with, we thought it would be useful to provide a month-by-month rundown of the key changes which will be implemented over the next 5 months as the scheme draws to a close.
June and July
- The government will continue to pay 80% of wages up to a cap of £2,500 plus employer national insurance and pension contributions. Employers are not required to pay anything.
- The furlough scheme will close for new entrants at the end of this month so 10th June 2020 will be the last day that employers can furlough additional employees, to enable them to complete the minimum 3-week furlough period by the end of the month.
- Furloughed staff can be brought back on a part-time basis from 1st July (this is a month earlier than previously announced). Employers must pay 100% of the employee’s usual wages for hours worked, with the furlough grant continuing to fund the non-working time. Further guidance on “flexible furloughing” is due to be published on 12th June.
August
- This is the month that the tapering off begins and employers will be required to make a gradually increasing contribution towards the salaries of their furloughed staff.
- The government will still pay 80% of wages up to a cap of £2,500 but employers must now pay employer national insurance and pension contributions for all staff they continue to keep on furlough.
- Self-employed workers will be able to claim for a second and final grant in August. The grant has been cut to 70% of average monthly trading profits, from the current level of 80%, and will be capped at £6,570.00. The funds will be paid out in a single instalment covering the months of June, July and August.
September
- The government’s contribution will be reduced to 70% of wages up to a cap of £2,187.50 and employers must now pay 10% of the wage bill for their furloughed staff plus employer national insurance and pension contributions.
October
- The government’s contribution will be reduced to 60% of wages up to a cap of £1,875.00 and employers must now pay 20% of the wage bill for their furloughed staff plus employer national insurance and pension contributions.
- The furlough scheme comes to an end on 31st October 2020.
Should you require any further advice in respect of the furlough scheme or any other employment-related matter please contact Jonathan Moreland by email at jmm@swinburnemaddison.co.uk or by telephone on 0191 384 2441.
