On 29th May, Rishi Sunak announced a number of important updates to the Coronavirus Job Retention Scheme including a cut off date for new entrants, flexible furloughing from 1st July and increased employer contributions from 1st August.
Cut off date for new entrants
The Job Retention Scheme will close to new entrants on 30th June. There is a minimum three week furlough period which means you must furlough an employee from 10th June at the latest to be able to use the scheme. If they stop working after this date, you won’t qualify for the Job Retention Scheme.
Any claims for the period to 30th June would need to be made by 31st July. If you’re a client of inniAccounts, we’ll process the claims on your behalf. Find out how here.
From 1st July, you can bring back furloughed employees on a part-time basis. It will be up to you to agree with your employees the hours and days they will work on their return and you will also be responsible for paying their wages during these periods. You will not receive any government support towards their wages for the time they’re working.
You can, however, still claim the grant for any time the employee is not working. You’ll need to have an agreement in writing about the new arrangement and the claim period is now just a minimum of one week.
For example, you could bring a full-time employee back to work two days per week. You’ll pay their wages for the two days they work, and you can claim the Job Retention Scheme grant for the remaining three days in which they’re furloughed.
Further guidance will be provided by the government. We expect that flexible furloughing will be appealing if you have employees working at a business premise, or if you’re a sole director/employee and are looking to resume part-time business development/contract seeking activities.
Increased employer contributions from 1st August
From 1st August, the government will gradually start to taper the level of the grant to reflect that people will be returning to work.
Whilst employees on furlough will still be entitled to receive 80% of their wages (subject to the cap of £2,500), the level of grant from the government is reducing as follows:
- In August, the government will continue to pay 80% of wages however employer’s National Insurance and pension contributions will no longer be covered.
- In September, the government will pay 70% of wages (subject to a cap of £2,187.50). The employer will need to pay the remaining 10%.
- In October, the government will pay 60% of wages (subject to a cap of £1,875). The employer will need to pay the remaining 20%.
More information from the government can be found here.