Coronavirus Job Retention Scheme (CJRS) – Furlough Update

As of 31st May approximately 8.7 million jobs were furloughed in the UK as part of the Government job retention scheme.  

Currently the Government are paying 80% of wages up to a maximum of £2500 per month plus  employer’s national insurance and pension contribution costs. However, the Chancellor Rishi Sunak has announced some changes to the scheme with a view to bringing it to a close.

Key Changes:

  • Flexible Furlough from 1st July
  • Closure of new employees being added to the scheme from the end of June
  • Reduction of financial support beginning in August

 


Flexible Furloughing

From 1st July

To help support businesses in bringing employees back to work the Government have announced a part-time furlough arrangement. The means that employees can be furloughed for any period of time (not the minimum 3 weeks currently required) and return to work for the remainder of the time.

For example:

An employee can return to work 3 days per week and still receive furlough for the other 2 days.

One thing to note is the £2,500 cap will be pro-rated. An employee working three days a week is effectively working 60% of the week. The £2,500 furlough cap will then be pro-rated to 40% so the maximum they can receive will be £1000

The financial support remains the same for July - 80% of furlough wages and employer’s national insurance and pension contribution costs.


Closure of the Scheme to New Employees

Deadline to add new employee’s - 10th June

The last date any new employees can be furloughed is the 10th June. As per the current rules, they will need to be furloughed for 21 days and cannot carry out work during this time.

Once this date has passed no new employees can be included in the part-time furlough arrangement which comes into action in July.


Reduction of Financial Support

From August the Government will slowly begin winding down the scheme and ask employers to start contributing toward the costs.  

August

You can still claim 80% of wages up to a maximum of £2,500

Employer national insurance and pension contribution costs will be withdrawn. Employers will have to pay this cost themselves.

September

You can only claim 70% of wages up to a maximum of £2,187.50. No employer national insurance or pension costs.

October

You can now only claim 60% of wages up to a maximum of £1,875. No employer national insurance or pension costs.

Whilst on furlough employees are still entitled to receive their furlough wages at 80%. Employers will have to make up the difference during the months of September and October.  

 


The Government are due to provide more guidance and clarity on the 12th June. We will of course update you with and important information when this happens. 

 If you need any advice or help with any of the changes to the scheme please do get in touch with us at Bookkeeper Buddy. We’re here virtually to help your business navigate through these difficult times and ensure you receive all the support provided.


Stay Safe