In a bid to get the country back to work, the Chancellor has announced the flexible furlough scheme will apply a month earlier than expected.
The new furlough scheme is designed to support businesses who are easing staff back to work. Employers will be able to put staff on part-time furlough from 1st July, claiming the Coronavirus Job Retention Scheme grant for the portion of their salary where they are not at work. However, only employers who have previously claimed under the original furlough scheme will be able to claim for the new scheme going forward. Also, employers will be only able to furlough employees they have furloughed for a full three-week period prior to 30 June, i.e. to fulfil the minimum three week furlough period, employees would have to be furloughed by 10th June to be eligible.
For June and July, the grant will be available on the same basis as now, with the government reducing its Job Retention Scheme contribution between August and October, and a gradual increase in the employer contributions during this time…
- 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 for the hours the employee doesn’t work – employers will have to pay employees for the hours they work
- August - the government will continue to pay 80% of wages up to a cap of £2,500 but employers will pay ER NICs and pension contributions – for the average claim, this represents 5% of the gross employment costs that they would have incurred if the employee had not been furloughed
- September - the government will pay 70% of wages up to a cap of £2,187.50 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 10% of wages to make up 80% of the total up to a cap of £2,500
- October - the government will pay 60% of wages up to a cap of £1,875 for the hours the employee does not work – employers will pay ER NICs, pension contributions and 20% of wages to make up 80% of the total up to a cap of £2,500
Please note, the cap on the furlough scheme grant will be proportional to the hours not worked.
For more information on claiming for furloughed employees under the Coronavirus Job Retention Scheme, please click here.
If you are yet to submit a claim for your current furloughed workforce, the government is advising to do this as a matter of urgency. If you need additional support, we’d be happy to help! Click here to book your initial Covid-19 consultation call with a member of the Oldfield Advisory team.
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