The Coronavirus Job Retention Scheme has become Britain’s new conversation starter instead of the weather or the traffic.
Despite not being a rock’n’roll topic, it’s vitally important to businesses. The issue is though, it’s often quite cryptic information to work through and implement.
So we thought we’d break down the new furlough updates for you and make it simple. Your business will be covered and you’ll be the conversationalist champion amongst your friends!
Furlough – Everything you need to know
The furlough scheme will be phased out between now and the end of October. Until August, the scheme will cover the employers NI and workplace pension contributions. The scheme will also continue to pay 80% of a furloughed employee’s regular salary until September.
The full furlough timeline…
The flexible furlough scheme starts on the 1st July, rather than the 1st August as previously stated.
This means that employees will be able to return to work on a part-time basis for any amount of time or work pattern, whilst still being eligible to receive the grant for hours not worked. The employer will have to pay 100% of their normal salary on their days worked and the furlough scheme will cover the other days.
To make a claim
The 1st July is the first time you can make claims for July, with the 31st July being the last day you can submit claims for periods ending on or before 30 June.
From the 1st July, only employees that have successfully claimed a previous grant will be eligible for more grants under the scheme, i.e., They were furloughed for at least three consecutive weeks between 1st March and 30th June 2020.
The scheme will continue to pay out 80% of the employee’s wages but employers will be expected to pay NIC and pension contributions for furloughed staff.
Employers will need to continue paying the NIC and workplace pension amounts, whilst now also paying a 10% contribution to furloughed employees’ wages. The employee will continue to receive 80% of their normal wages up to a capped amount of £2,500 but the amount the government contributes will be 70% of that amount, capped at £2,187.50.
Employer’s contributions to wages will rise from 10% to 20%, with the scheme closing at the end of October. Throughout October, a furloughed employee will continue to be entitled to receive 80% of their normal wages, but the Government contribution for this month will be 60% of those wages, capped at £1,875.
We will continue to keep you fully updated of changes that will affect your business, finances and conversation starters!
Take care, stay safe and be sure to follow us across social media for real-time updates.