On the 29th May 2020, the Chancellor announced more details about the Coronavirus Job Retention Scheme (also referred to as the furlough scheme). This post outlines the changes that will be put into place starting from the 1st July 2020, as well as further changes that are planned for the coming months.


Increased flexibility for furloughed workers

From the 1st July, the scheme will become more flexible, allowing furloughed employees to work part-time and still receive a grant for the time spent not working. The government will continue to pay up to 80% of wages for any hours unworked. This move is designed to allow businesses to bring employees back to work gradually whilst without paying full wages.

Employers will decide the hours and shifts that employees work and will be responsible for paying those wages in full before claiming back the funds. As before, there is no minimum time that employers can furlough staff for, so there is no need to re-introduce furloughed staff on a part-time basis if your business is not yet ready to do so.


Employers’ contributions to the furlough scheme

From 1st August, employers will be asked to contribute towards the wages of their furloughed employees, this will gradually increase in September and October. The changes to employers’ contributions over the coming months are outlined in the table below:

Month Contributions
June-July The government will pay 80% of wages up to £2,500 as well as National Insurance (NI) and Pension contributions for the hours employees do not work.
August The government will pay 80% of wages up to £2,500 but employers will be asked to pay NI and pension contributions.
September The government will pay 70% of wages up to £2,187.50 but employers will pay NI and pension contributions, as well as 10% of wages to make the total up to a cap of £2,500.
October The government will pay 60% of wages up to £1,875 but employers will pay NI, pension contributions, and 20% of wages (making up the total to 80% of the full salary).

Throughout these months, the cap on the furlough grant will always be proportional to the hours not worked.


Can I still apply for the furlough scheme?

Yes, you are still able to apply for the Coronavirus Job Retention Scheme up until the 30th June 2020. To check if you’re eligible and apply, visit the government site. After the 30th June, employers will only be able to furlough employees that they have furloughed for a full 3 weeks prior to this date.


Self-Employment Income Support Scheme extended

In addition to the update about the Coronavirus Job Retention Scheme, Rishi Sunak also announced that the Self-Employment Income Support Scheme (SEISS) is being extended. Those eligible will be able to claim a second and final grant in August, with more information about this second grant to be announced by the government on the 12th June.

Payments will be made in the form of a taxable grant worth 70% of their average monthly trading profits for 3 months. This is paid in one instalment and capped at £6,570. The eligibility criteria for the second grant will be the same as the first, you can still claim the second grant if you didn’t claim the first. You must make the claim yourself – it can not be done on your behalf by an agent. 

Hopefully, this post had provided you with a clear idea of the updates to the Coronavirus Job Retention Scheme and Self-Employed Income Support Scheme. If you need help with bookkeeping, payroll, cloud accounting, or accounts preparation, don’t hesitate to get in touch!

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