NEWS UPDATE 29 May 2020:
The Job Retention Scheme has now been confirmed as extended by a further 4 months to the end of October, and with employers being required to contribute to the costs from the end of July onwards.
Employees who are furloughed will continue to be entitled to the same amount: up to 80% salary subject to a maximum £2,500 cap.
The government provided more detail on how the extended scheme will operate on 29 May.
You can find our main guide setting out the full details of the job retention scheme including here.
The key changes to note:
During June and July 2020: the scheme will remain as before in terms of caps and conditions: 80% of salary for employees, up to a £2,500 cap.
However, from 1 July, the government has now introduced the concept of 'flexible furlough' meaning that furloughed staff will be able to work for their employers part-time from this date, and the remainder of that time when they are not working, they can continue to be furloughed under the furlough scheme. The flexible furlough arrangement will continue from this date until the scheme expires.
Employers will be given 'maximum flexibility to decide on the right arrangements for their business, so for example, currently furloughed staff could, from 1 July, be brought back from furlough for 1 day a week, or more (as each employer chooses). For those working days, they should be paid normally and fully by their employer. For any other days that they are not working for their employer and during which they remain on furlough, the government scheme will pick up the tab, subject to the caps and conditions set by the government (and these will adjust over the months - see more on that below).
Crucially, to benefit from the job retention scheme in the future, staff must have been furloughed by June 10th, as no new entrants to the scheme will be permitted after 30th June.
From 1 August, the government/tax payer will continue to pick up the 80% tab. BUT, employers will need to pick up National Insurance and pension contributions from their own budgets.
From 1 September, the 80% contribution to the salary is reduced. The government/taxpayer will cover 70% of salary and employers will be required to contribute 10% of that figure, (so that employees remain unaffected and still get 80% up to £2,500 limit) but employers start to share the burden.
And from 1 October, the contribution will reduce further to 60% of salary and employers will contribute 20% for all furlough days.
The government has also made clear that they intend the scheme to finish at the end of October and that they do not wish to see it being further extended.
Different reliefs cover the self-employed, who can seek financial support under a separate scheme (called the Self-Employment Income Support Scheme – see further here.
Huge thanks, as always, to our wonderful partner Boffix’s Head of Accounting Aaron Patrick for collaborating on this content.
Different reliefs cover the self-employed, who can see financial support under a separate scheme (called Statutory Self-Employment Pay – see further below). Huge thanks, as always, to our wonderful partner, Boffix’s Head of Accounting Aaron Patrick, for collaborating on this content.
The remainder of this guide will be updated on 1 June, to take account of the above update.
If you intend to furlough staff under the scheme, remember that you must have done so by 10th June, to benefit from the extended period and continuing arrangements beyond 1 July.
In our continuing rapid-fire video series, we checked in with Aaron Patrick from Boffix to get the latest view on how small businesses are faring in the Covid-19 world…
Progress so far for small businesses
A week on from the implementation of the job retention scheme, we wanted to know how businesses had been getting on submitting their claims to the government and how that system was to work with. So we asked Aaron how businesses have been faring so far and what positivity he's seen as a result of the schemes...
How businesses are behaving in a Covid-19 world
Beyond the job retention scheme, many businesses are having to make big decisions while under tremendous stress. In the following videos, Aaron shares his insight on how different businesses are approaching the situation...
What does the future hold for small businesses?
Finally, we asked Aaron for his opinions on the future of the small business community and what are the next steps for small businesses, be they thriving or surviving through the current crisis.
Further resources for small businesses needing help in a Covid-19 world
Huge thanks, as always, to our wonderful partner Boffix’s Head of Accounting Aaron Patrick for collaborating on this content. If you need support with the job retention scheme or any other financial factors affecting your business, let us know and we can put you in touch with Aaron and the excellent team at Boffix.