Furlough Update

This Friday is the deadline for submitting Furlough Claims under the Coronavirus Job Retention Scheme for periods dated 30th June or prior.

After that, claims will be submitted under what is being termed “Flexible Furloughing” where staff, subject to certain conditions, can be brought back part-time and furloughed for the remainder of their normal hours. These hours are changeable and hence the hours worked each week or month can reflect the employers need. Therefore, subsequent submissions will ask for information on hours worked and “normal” hours for staff brought back on a part-time basis.

However, 1st August is also the start of several other changes over the coming months: –

• August – the furlough grant will no longer cover Employers NI and Pension contributions for furloughed staff and therefore employers will have to bear that cost whilst still recovering 80% of wages (up to a maximum of £2,500) for the hours an employee is on furlough
• September – Employees must still be paid at least 80% of their wages but employers will only be permitted to recover 70% (up to a maximum of £2,187.50) for the hours an employee is on furlough. The employer will therefore have to cover the 10% cost themselves along with all the Employers’ NI and Pension contributions
• October – Employees must still be paid at least 80% of their wages but employers will only be permitted to recover 60% (up to a maximum of £1,875) for the hours an employee is on furlough. The employer will therefore have to cover the 20% cost themselves along with all the Employers’ NI and Pension contributions

At the moment, the Coronavirus Job Retention Scheme then ceases at the end of October. Therefore, part of the cost burden of the scheme is gradually moving from the Government to the Employer over the next three months until the scheme is withdrawn completely.

The calculation of claims under the scheme will therefore be more complicated and there will be an increased cash cost to the business. Detailed record keeping of hours worked and hours furloughed will also be required to ensure a submission can be made and accepted.

If you would like any more information on the Furlough scheme or advice on how to navigate your business through the ending of lockdown in the UK, please get in touch with a member of our team today.

Previous news article

Next news article