The Chancellor has set out more details on how the Coronavirus Job Retention Scheme will continue to support jobs and businesses as people return to work. Here, Steph Hammond, director of accounts, explains when and how the support will be phased out.
The scheme will close to new entrants from 30 June. From this point onwards, you will only be able to furlough employees that you have furloughed for a full three-week period prior to 30 June.
This means that the final day that you can furlough an employee for the first time will be 10 June for the current three-week furlough period to be completed by 30 June.
Employers will have until 31 July to make any claims in respect of the period to 30 June.
From 1 July 2020, businesses will be given the flexibility to bring furloughed employees back part time.
Individual firms will decide the hours and shift patterns their employees will work on their return - and 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 that people will be returning to work.
This means:
- During 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.
- In 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.
- From 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.
- From 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.
A move out of lockdown
The support provided by the government throughout the coronavirus lockdown has been much needed by both businesses and employees, so it is welcome news to learn that the help will not just disappear.
Employees need to be able to return to work gradually and safely. However, one big concern remains – those previously viable firms in the leisure and hospitality sector will require further help in the months to come.
If you would like any further help navigating the changes – or advice on what to do next – contact our team today via info@beatons.co.uk or call 01473 659777.